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Why Is Penumbra (PEN) Up 20% Since Last Earnings Report?
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A month has gone by since the last earnings report for Penumbra (PEN - Free Report) . Shares have added about 20% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Penumbra due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Penumbra Q2 Earnings Miss, Gross Margin Contracts
Penumbrareported second-quarter 2024 adjusted earnings per share of 64 cents, which surpassed the Zacks Consensus Estimate by 14.3%. Adjusted earnings per share improved 48.8% year over year.
GAAP loss was $1.55 per share against the year-ago GAAP earnings of 48 cents per share.
Q2 Revenues
Penumbra registered revenues of $299.4 million in the reported quarter, up 14.5% year over year on a reported basis and 14.7% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by a marginal 0.3%.
Quarter in Details
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $218.2 million (72.9% of total revenues) in the United States, up 16.8% year over year on a reported basis as well as at CER.
Sales increased 8.7% to $81.2 million in the International segment. Excluding foreign currency impact, the unit’s sales were up 9.7% year over year.
On its fourth-quarter 2023 earnings call, Penumbra announced changes to its product revenue categories to provide investors with more meaningful information to understand the performance of its business and strategic direction. Per the changes, the company currently reports its product revenues under the categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $203.5 million from sales of Thrombectomy products, up 25.2% on a reported basis and 25.4% at CER.
Sales of Embolization and Access products totaled $95.9 million, down 3.1% on a reported basis and 3% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit deteriorated 2.4% year over year to $162.8 million. Gross margin contracted a huge 942 basis points to 54.4% on a 44.3% surge in the cost of revenues.
Selling, general and administrative expenses rose 11.4% to $141.9 million. Research and development expenses totaled $24.9 million, up 15.8% year over year. Total operating expenses were $166.8 million, up 11.9% year over year.
The company reported adjusted operating loss of $4 million against the year-ago adjusted operating profit of $17.9 million.
Financial Update
Penumbra exited the second quarter of 2024 with cash and cash equivalents and marketable investments of $339.7 million compared with $223.1 million at the end of the first quarter of 2024.
Updated 2024 Guidance
The company updated its total revenue projection for 2024 in the range of $1.18-$1.20 billion (down from its previous guidance of $1.23-$1.27 billion). This is the result of a reduction of business in China due to a more challenging economic backdrop for medical devices in the near-term and the delayed expected launch of FLASH and BOLT 7 computer-assisted vacuum thrombectomy (CAVT) products in Europe. The Zacks Consensus Estimate for revenues is currently pegged at $1.24 billion.
It also lowered its guidance for the U.S. thrombectomy franchise’s growth to 23-25% from the previously projected band of 27-30%.
Gross margin and adjusted operating margin are expected to be in the range of 100-150 and 100-200 basis points expansion, respectively, for the full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -19.13% due to these changes.
VGM Scores
At this time, Penumbra has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Penumbra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Penumbra is part of the Zacks Medical - Instruments industry. Over the past month, Edwards Lifesciences (EW - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Edwards Lifesciences reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of -9.4%. EPS of $0.70 for the same period compares with $0.66 a year ago.
For the current quarter, Edwards Lifesciences is expected to post earnings of $0.68 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Edwards Lifesciences. Also, the stock has a VGM Score of F.
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Why Is Penumbra (PEN) Up 20% Since Last Earnings Report?
A month has gone by since the last earnings report for Penumbra (PEN - Free Report) . Shares have added about 20% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Penumbra due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Penumbra Q2 Earnings Miss, Gross Margin Contracts
Penumbrareported second-quarter 2024 adjusted earnings per share of 64 cents, which surpassed the Zacks Consensus Estimate by 14.3%. Adjusted earnings per share improved 48.8% year over year.
GAAP loss was $1.55 per share against the year-ago GAAP earnings of 48 cents per share.
Q2 Revenues
Penumbra registered revenues of $299.4 million in the reported quarter, up 14.5% year over year on a reported basis and 14.7% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by a marginal 0.3%.
Quarter in Details
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $218.2 million (72.9% of total revenues) in the United States, up 16.8% year over year on a reported basis as well as at CER.
Sales increased 8.7% to $81.2 million in the International segment. Excluding foreign currency impact, the unit’s sales were up 9.7% year over year.
On its fourth-quarter 2023 earnings call, Penumbra announced changes to its product revenue categories to provide investors with more meaningful information to understand the performance of its business and strategic direction. Per the changes, the company currently reports its product revenues under the categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $203.5 million from sales of Thrombectomy products, up 25.2% on a reported basis and 25.4% at CER.
Sales of Embolization and Access products totaled $95.9 million, down 3.1% on a reported basis and 3% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit deteriorated 2.4% year over year to $162.8 million. Gross margin contracted a huge 942 basis points to 54.4% on a 44.3% surge in the cost of revenues.
Selling, general and administrative expenses rose 11.4% to $141.9 million. Research and development expenses totaled $24.9 million, up 15.8% year over year. Total operating expenses were $166.8 million, up 11.9% year over year.
The company reported adjusted operating loss of $4 million against the year-ago adjusted operating profit of $17.9 million.
Financial Update
Penumbra exited the second quarter of 2024 with cash and cash equivalents and marketable investments of $339.7 million compared with $223.1 million at the end of the first quarter of 2024.
Updated 2024 Guidance
The company updated its total revenue projection for 2024 in the range of $1.18-$1.20 billion (down from its previous guidance of $1.23-$1.27 billion). This is the result of a reduction of business in China due to a more challenging economic backdrop for medical devices in the near-term and the delayed expected launch of FLASH and BOLT 7 computer-assisted vacuum thrombectomy (CAVT) products in Europe. The Zacks Consensus Estimate for revenues is currently pegged at $1.24 billion.
It also lowered its guidance for the U.S. thrombectomy franchise’s growth to 23-25% from the previously projected band of 27-30%.
Gross margin and adjusted operating margin are expected to be in the range of 100-150 and 100-200 basis points expansion, respectively, for the full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -19.13% due to these changes.
VGM Scores
At this time, Penumbra has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Penumbra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Penumbra is part of the Zacks Medical - Instruments industry. Over the past month, Edwards Lifesciences (EW - Free Report) , a stock from the same industry, has gained 8.9%. The company reported its results for the quarter ended June 2024 more than a month ago.
Edwards Lifesciences reported revenues of $1.39 billion in the last reported quarter, representing a year-over-year change of -9.4%. EPS of $0.70 for the same period compares with $0.66 a year ago.
For the current quarter, Edwards Lifesciences is expected to post earnings of $0.68 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Edwards Lifesciences. Also, the stock has a VGM Score of F.