Cardiovascular Systems, Inc. CSII has been at a net loss for a long time, which is worrying. Fierce competition and the expected failure of overseas business growth continue to pose a threat to the stock. The stock currently has a Zacks Rank #5 (Strong Sell).
In the past year, the performance of the cardiovascular system has lagged behind the industry. The stock has fallen 25.2%, while the industry’s gain is 0.3%.
Cardiovascular Systems' loss in the first quarter of fiscal 2021 was greater than the figure for the same period last year and the Zacks Consensus Estimate. The company's revenue is too far behind the market consensus and is down year-on-year. The external revenue in the reporting quarter dropped significantly.
According to the company, the resurgence of COVID-19 and related staff shortages have disrupted referral patterns and had the greatest impact on more selective procedures, such as the treatment of low acuity peripheral claudication. The cardiovascular system pointed out that due to the time and geographic location of the delta surge, the severity and duration of the impact of COVID-19 were greater than expected and more obvious.
Cardiovascular Systems, Inc. prices | Cardiovascular Systems, Inc. Quotation
In terms of profitability, Cardiovascular Systems has been experiencing net losses since its establishment in 1989. Although it achieved a net profit of US$1.7 million in fiscal year 2018, sustainability is an issue. In fiscal 2021, the company reported a net loss of $13.4 million. In fiscal year 2020 and fiscal year 2019, the company reported net losses of US$27.2 million and US$300,000, respectively. Also in the first quarter of fiscal year 2022, the situation remains unchanged, with the company reporting a net loss of 22 cents per share.
In addition, OAS products for the cardiovascular system compete with various other products or devices used to treat vascular diseases, including stents, balloon angioplasty catheters and plaque resection catheters, as well as products for vascular surgery. The company faces price competition from large competitors in the stent and balloon angioplasty market.
On the positive side, in the first fiscal quarter, the continued strength of the coronary artery franchise of the cardiovascular system in Japan and the increasing popularity of the European coronary OAS achieved strong performance on a global scale. Specifically, although coronary artery OAS surgeries fell by 2%, global coronary artery revenues increased by 10% due to the continued adoption of coronary artery support products, and the United States increased by 2%. Outside the United States, due to the continued strength of Japan and the increasing adoption of coronary OAS in Europe, coronary revenues increased to US$3.2 million from the same period last year. In Japan, the company currently has a 44% market share. In the first fiscal quarter, the company sold $756 worth of support products for every coronary OAS sold. This quarter-on-quarter increase shows that even with a slight decline in coronary surgery, the company's ISP has strong resilience. In the reported quarter, total sales of coronary artery support products were $2.7 million. The company also certified 80 new crown users internationally this quarter, consistent with previous quarters. In the second fiscal quarter, the cardiovascular system is expected to resume continuous growth. This quarter, the company will continue to train new PAD accounts and new users to deepen the penetration of large hospital systems and OBL. It also plans to initiate the full commercial launch of Viper cross-peripheral catheters in the second fiscal quarter.
In the broader medical field, some of the better-ranked stocks are Chemed Corporation CHE, National Vision Holdings, Inc. EYE and West Pharmaceutical Services, Inc. WST, each with Zacks ranked second (buy). You can view the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Chemed's long-term earnings growth rate is 7.7%. The company has exceeded earnings expectations in three of the past four quarters, and failed to meet expectations in one quarter, with an unexpected average of 5.6%.
In the past year, Chemed has outperformed its industry. The stock rose 3.7%, while the industry fell 35.6%.
National Vision's long-term earnings growth rate is 23%. The company's earnings in the past four quarters exceeded expectations, with an average surprise of 113.1%.
National Vision has outperformed the industry in the past year. The stock rose 18.1%, while the industry fell 0.1%.
Western medicine's long-term profit growth rate is 27.6%. The company's earnings in the past four quarters exceeded expectations, with an average surprise of 29.4%.
Western medicine has outperformed its industry in the past year. Compared with the industry's 16.5% increase, the stock rose 43.6%.
Want the latest advice from Zacks Investment Research? Today, you can download the 7 best stocks for the next 30 days. Click to get this free report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report Chemed Corporation (CHE): Free Stock Analysis Report Cardiovascular Systems, Inc. (CSII): Free Stock Analysis Report National Vision Holdings, Inc. (EYE): Free stock analysis report To read this article on Zacks.com, click here.
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