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AngioDynamicis' (ANGO) Solero MTA System to Drive Growth

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On Oct 3, we issued an updated research report on Latham, NY-based AngioDynamics Inc. (ANGO - Free Report) . The company recently reported a dismal first quarter of fiscal 2018 wherein adjusted earnings and revenues missed the Zacks Consensus Estimate.

AngioDynamics has a Zacks Rank #2 (Buy) at the moment.

The company rides on the market’s solid response to Solero Microwave Tissue Ablation (MTA) system, especially within the Microwave Ablation space. The platform is intended to be used for the ablation of soft tissue during open procedures. A research report by Micro Market Monitor suggests that the Global Microwave Ablation is expected to reach a worth of $201 million by 2018.

Despite ending the first quarter on a tepid note, the company reaffirmed its guidance for fiscal 2018. AngioDynamics expects adjusted earnings per share in the band of 64 cents to 68 cents. Revenues are projected in the range of $352 million to $359 million. Furthermore, free cash flow is expected to be more than $35 million.

It is important to note that foreign exchange did not have any impact in the reported quarter. However, continued softness in the Vascular Access and Venous business affected revenues in the first quarter.

Growth in the core Angiographic Catheter business is also likely to fortify the company’s footprint in the global space. Angiographic business falls under the company’s Peripheral Vascular (PV) segment. We believe that AngioVac is a key growth driver for the PV segment. Management expects the ‘Thrombus Management’ platform in the PV product line to lend competitive advantage and open up significant long-term opportunities.

However, AngioDynamics ended the first quarter with an outstanding debt of $96.3 million. This is likely to impose certain operating and financial restrictions, impeding the company’s core business initiatives.

Coming to the stock’s price performance, AngioDynamics saw a negative return of almost 1.3% over the last year, significantly underperforming the S&P 500’s 16.4% gain over the same time frame. Furthermore, the current level is lower than the broader industry’s gain of 6.9%.

 

 

Other Key Picks

A few other top-ranked stocks in the broader medical sector are SONOVA HOLDING (SONVY - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Luminex Corporation . SONOVA and Luminex have a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

SONOVA represented a solid return of 14.5% over the last year. The company has a long-term expected earnings growth rate of 7%.

IDEXX Laboratories has an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Luminex came up with a positive earnings surprise of 188.9% in the last quarter. The stock has a long-term expected earnings growth rate of 16.3%.

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