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Why Is Penumbra (PEN) Up 6.7% 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 6.7% 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 drivers.
Penumbra Q3 Earnings Beat, Margins Expand
Penumbra reported third-quarter 2024 adjusted earnings per share of 85 cents, which surpassed the Zacks Consensus Estimate by 23.2%. Adjusted earnings per share improved 26.9% year over year.
GAAP earnings were 75 cents per share, a 226% jump from the year-ago GAAP earnings of 23 cents per share.
Q3 Revenues
Penumbra registered revenues of $301 million in the reported quarter, up 11.1% year over year on a reported basis and 10.9% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by 1%.
Penumbra's Q3 Results in Detail
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $226.3 million (75.2% of total revenues) in the United States, up 16.2% year over year on a reported basis as well as at CER.
Sales in the International segment dropped 1.9% to $74.7 million. Excluding the impact of foreign currency, the unit’s sales were down 2.5% year over year.
The company currently reports its product revenues under two categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $204.1 million from sales of Thrombectomy products, up 14% on a reported basis and 13.8% at CER.
Sales of Embolization and Access products totaled $96.9 million, up 5.5% on a reported basis and 5.2% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit improved 12.7% year over year to $200.3 million. Gross margin expanded 95 basis points to 66.5% despite an 8.1% rise in the cost of revenues.
Selling, general and administrative expenses rose 10.9% to $139.7 million. Research and development expenses totaled $25.2 million, up 20.3% year over year. Total operating expenses were $14.9 million, up 12.3% year over year.
The company reported adjusted operating margin of 11.7%, a 37-bp expansion year over year.
Financial Update
Penumbra exited the third quarter of 2024 with cash and cash equivalents and marketable investments of $291 million, compared with $339.7 million at the end of the second quarter of 2024.
Updated 2024 Guidance
The company reiterated its total revenue projection for 2024 in the range of $1.18-$1.20 billion.
The company narrowed its expectation for the U.S. thrombectomy franchise growth to the range of 24% to 25% year over year, compared with 23% to 25% expected previously.
The Zacks Consensus Estimate for revenues is currently pegged at $1.19 billion.
The gross margin and adjusted operating margin expansion guidance for the full year was reiterated at 100-150 and 100-200 basis points, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 7.78% due to these changes.
VGM Scores
Currently, Penumbra has a great Growth Score of A, a grade with the same score on the momentum front. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Penumbra has a Zacks Rank #2 (Buy). We expect an above average 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, Inari Medical, Inc. (NARI - Free Report) , a stock from the same industry, has gained 5.4%. The company reported its results for the quarter ended September 2024 more than a month ago.
Inari Medical reported revenues of $153.39 million in the last reported quarter, representing a year-over-year change of +21.4%. EPS of -$0.13 for the same period compares with $0.05 a year ago.
Inari Medical is expected to post a loss of $0.04 per share for the current quarter, representing a year-over-year change of -180%. Over the last 30 days, the Zacks Consensus Estimate has changed +22.9%.
Inari Medical has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Penumbra (PEN) Up 6.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Penumbra (PEN - Free Report) . Shares have added about 6.7% 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 drivers.
Penumbra Q3 Earnings Beat, Margins Expand
Penumbra reported third-quarter 2024 adjusted earnings per share of 85 cents, which surpassed the Zacks Consensus Estimate by 23.2%. Adjusted earnings per share improved 26.9% year over year.
GAAP earnings were 75 cents per share, a 226% jump from the year-ago GAAP earnings of 23 cents per share.
Q3 Revenues
Penumbra registered revenues of $301 million in the reported quarter, up 11.1% year over year on a reported basis and 10.9% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by 1%.
Penumbra's Q3 Results in Detail
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $226.3 million (75.2% of total revenues) in the United States, up 16.2% year over year on a reported basis as well as at CER.
Sales in the International segment dropped 1.9% to $74.7 million. Excluding the impact of foreign currency, the unit’s sales were down 2.5% year over year.
The company currently reports its product revenues under two categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $204.1 million from sales of Thrombectomy products, up 14% on a reported basis and 13.8% at CER.
Sales of Embolization and Access products totaled $96.9 million, up 5.5% on a reported basis and 5.2% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit improved 12.7% year over year to $200.3 million. Gross margin expanded 95 basis points to 66.5% despite an 8.1% rise in the cost of revenues.
Selling, general and administrative expenses rose 10.9% to $139.7 million. Research and development expenses totaled $25.2 million, up 20.3% year over year. Total operating expenses were $14.9 million, up 12.3% year over year.
The company reported adjusted operating margin of 11.7%, a 37-bp expansion year over year.
Financial Update
Penumbra exited the third quarter of 2024 with cash and cash equivalents and marketable investments of $291 million, compared with $339.7 million at the end of the second quarter of 2024.
Updated 2024 Guidance
The company reiterated its total revenue projection for 2024 in the range of $1.18-$1.20 billion.
The company narrowed its expectation for the U.S. thrombectomy franchise growth to the range of 24% to 25% year over year, compared with 23% to 25% expected previously.
The Zacks Consensus Estimate for revenues is currently pegged at $1.19 billion.
The gross margin and adjusted operating margin expansion guidance for the full year was reiterated at 100-150 and 100-200 basis points, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 7.78% due to these changes.
VGM Scores
Currently, Penumbra has a great Growth Score of A, a grade with the same score on the momentum front. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Penumbra has a Zacks Rank #2 (Buy). We expect an above average 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, Inari Medical, Inc. (NARI - Free Report) , a stock from the same industry, has gained 5.4%. The company reported its results for the quarter ended September 2024 more than a month ago.
Inari Medical reported revenues of $153.39 million in the last reported quarter, representing a year-over-year change of +21.4%. EPS of -$0.13 for the same period compares with $0.05 a year ago.
Inari Medical is expected to post a loss of $0.04 per share for the current quarter, representing a year-over-year change of -180%. Over the last 30 days, the Zacks Consensus Estimate has changed +22.9%.
Inari Medical has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.