Yahoo Finance Reasons to Retain ShockWave Medical (SWAV) in Your Portfolio
ShockWave Medical, Inc. SWAV is well poised for growth, backed by its research and development (R&D) efforts and focus on clinical studies.
The company currently carries a Zacks Rank #3 (Hold).
With a market capitalization of $8.14 billion, this medical device company is committed to developing and commercializing products that can change the way calcified cardiovascular disease is treated.
ShockWave Medical’s earnings yield of 1.8% compares favorably with the industry’s (7%). Its earnings beat estimates in each of the trailing four quarters, the average surprise being 118.36%.
What’s Driving the Company’s Performance?
SWAV invests in R&D efforts to accelerate its Intravascular Lithotripsy (IVL)Technology, thereby broadening and enhancing its existing product offerings. In the first quarter of 2023, the company incurred R&D expenses of $23.7 million, up 61.2% from the prior-year quarter’s level.
For 2023, the company expects revenues in the $700-$720 million range, implying growth of 43-47% from the previous year’s number.
ShockWave Medical believes in its ability to rapidly develop innovative products, owing to a dynamic product innovation process. The versatility and leveraging ability of its core technology and management philosophy continue to improve its R&D process.
The company recruits and retains engineers and scientists with substantial expertise in developing medical devices. Its pipeline of products in various stages of development is anticipated to provide additional commercial opportunities.
Since its inception, ShockWave Medical has been committed to generating clinical data to substantiate the safety and effectiveness of its IVL Technology. The initial studies consistently highlighted low rates of complications irrespective of the type of vessel being examined.
Apart from getting regulatory approvals or clearances, data from the company’s clinical studies strengthen its ability to drive the adoption of IVL Technology throughout multiple therapies in its existing and new market segments.
SWAV’s previous studies guided optimal IVL procedure technique and enriched the design of its IVL System and products under development. Management is optimistic about the continued clinical acceptance and penetration of IVL, as demonstrated by its strong results in first-quarter 2023 and a higher outlook for 2023 revenues.
The company has ongoing clinical programs for several products and indications. On being successful, these will enable SWAV to expand the commercialization of its products into new geographies and indications.
Shockwave Medical received regulatory approval for the Shockwave C2 Coronary IVL Catheter in Japan in 2022. Besides, the company also announced the introduction and global availability of its M5+ peripheral IVL catheter, post the receipt of the CE mark and the FDA clearance last year.
ShockWave Medical, Inc. Price
ShockWave Medical, Inc. price | ShockWave Medical, Inc. Quote
What’s the Downside?
Limited commercialization expertise and approved or cleared products pose a challenge in evaluating SWAV’s current business and determining future financial growth.
Estimates
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $668.8 million, indicating an improvement of 36.6% from the previous year’s reported figure. The same for adjusted earnings per share (EPS) is pegged at $3.92.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Merit Medical Systems MMSI, West Pharmaceutical Services WST and Perrigo PRGO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical Systems has an estimated long-term growth rate of 11%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.22%.
So far this year, MMSI’s shares have risen 18.9% compared with the industry’s 8.7% growth.
West Pharmaceutical Services has an estimated long-term growth rate of 6.3%. Its earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 13.61%.
So far this year, WST’s shares have gained 49.1% compared with the industry’s 8.7% growth.
Perrigo’s earnings are expected to improve 24.6% in 2023. The strong momentum is likely to continue in 2024 as well. PRGO’s earnings surpassed estimates in two of the trailing four quarters and missed the same twice, the average negative surprise being 0.79%.
The company has lost 11.5% so far this year against the industry’s 4.8% growth.
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Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
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ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
