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Cardiovascular Systems (CSII) Ails From Soft Volume, Macro Woes

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Cardiovascular Systems suffered operating loss amid several macroeconomic hurdles. The stock carries a Zacks Rank #4 (Sell).

The company’s second-quarter fiscal 2022 loss per share was wider than the consensus mark. Revenues, too, missed the Zacks Consensus Estimate. Worldwide peripheral revenues decreased 1.2% year over year.

Sporadic staffing shortages continued to impact peripheral procedural volumes, particularly for lower acuity patients with intermittent quantitation. The operating loss was significant on mounting costs and expenses.

On the profitability front, Cardiovascular Systems bears a long history of incurring net losses since its inception in 1989 and although it generated a net profit of $1.7 million in fiscal 2018, sustainability is a matter of question. In fiscal 2022, the company reported a net loss of $10.6 million. In fiscal 2021, 2020 and 2019, the company reported net losses of $13.4 million, $27.2 million and $0.3 million, respectively.

Tough competition, consistent net loss and anticipated failure to grow business overseas continue to pose threats to this stock.

On a positive note, fiscal second quarter revenues exceeded the year-ago figure by 3.9%. Worldwide coronary revenues rose 13.9% year over year. The gross margin in the reported quarter was 69.9%, up 52 basis points year over year.

While the company’s business is facing several macroeconomic hurdles recently, the latest merger agreement with Abbott seems strategically aligned. Cardiovascular Systems is expected to add new, complementary technologies to Abbott's vascular device offerings.

Post the completion of the deal, Cardiovascular Systems will add new, complementary technologies to Abbott's vascular device offerings. This business will continue as the surviving corporation and as a wholly-owned subsidiary of Abbott.

Key Picks

Some better-ranked stocks in the overall healthcare sector are Haemonetics Corporation (HAE - Free Report) , TerrAscend Corp. and Akerna Corp. . Haemonetics and TerrAscend sport a Zacks Rank #1 (Strong Buy), while Akerna carries a Zack Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Haemonetics’ stock has risen 37.8% in the past year. Earnings estimates for Haemonetics have increased from $2.91 per share to $2.94 for 2023, and from $3.28 per share to $3.29 for 2024 in the past 30 days.

HAE’s earnings beat estimates in all the last four quarters, delivering an average surprise of 10.98%. In the last reported quarter, it reported an earnings surprise of 7.59%.

Estimates for TerrAscend in 2023 have decreased from a loss of 10 cents per share to a loss of 8 cents per share in the past 30 days. Shares of TerrAscend have declined 73% in the past year.

TerrAscend’s earnings beat estimates in one of the last three quarters and missed the mark in the other two, the average negative surprise being 136.11%. In the last reported quarter, TRSSF delivered an earnings surprise of 216.67%.

Akerna’s stock has declined 96.8% in the past year. Its estimates for 2023 have remained constant at a loss of $1.91 per share over the past 30 days.

Akerna missed earnings estimates in all the last four quarters, delivering a negative earnings surprise of 15.49%, on average. In the last reported quarter, KERN delivered a negative earnings surprise of 13.33%.


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