AngioDynamics Remains Neutral - Analyst Blog


On Jan 10, we maintained our Neutral recommendation on AngioDynamics Inc. ( ANGO ). We are disappointed about ANGO's fiscal second quarter but we believe the company is positioned for long-term growth driven by its focus on interventional peripheral products and new offerings from recent acquisitions.

Why Maintained?

On Jan 9, AngioDynamics posted adjusted earnings of 6 cents per share for the second quarter of fiscal 2014 that not only ebbed sharply by 40% from 10 cents in the year-ago quarter but also missed the Zacks Consensus Estimate by a penny. Net adjusted earnings fell 34.5% to $2.3 million from $3.5 million a year ago.

Revenues inched up 2% to $88.6 million, marginally exceeding the Zacks Consensus Estimate of $88 million. Excluding the planned termination of the supply agreement with Boston Scientific Corporation ( BSX ), sales grew 3% to $87.0 million from $84.5 million in last year's comparable quarter.

Owing to the stronger-than-expected first half results, ANGO upgraded the low-end of its revenue guidance to $349-$353 million for fiscal 2014 from the prior level of $347-$353 million. However, the company retained its adjusted EPS guidance in the range of 63 to 67 cents, excluding amortization for the year.

For the third quarter of fiscal 2014, AngioDynamics expects revenues to lie between $85 and $88 million, reflecting a 4-8% increase at the top-end over the prior-year quarter. Adjusted EPS (excluding amortization) for the quarter is expected in the range of 15 to 18 cents.

Following the release of fiscal second quarter results, the Zacks Consensus Estimate for fiscal 2014 earnings remained same at 34 cents per share. However, the Zacks Consensus Estimate for fiscal 2015 earnings rose 6.7% to 48 cents per share.

ANGO enjoys a leading market share in several of its operating segments including angiographic products and thrombolytic catheters and products. The market served by AngioDynamics is in excess of $1 billion, and continues to grow.

However, stringent capital-spending environment in the global economy is adversely affecting ANGO's top line. Further, the company is exposed to a stringent regulatory environment, which might dampen product approvals for pipeline products.

Other Stocks to Look For

Some better-ranked stocks that are performing well in the medical instruments industry include Cepheid ( CPHD ) and CryoLife Inc. ( CRY ). Both these stocks carry a Zacks Rank #1 (Strong Buy).

ANGIODYNAMICS (ANGO): Free Stock Analysis Report

BOSTON SCIENTIF (BSX): Free Stock Analysis Report

CEPHEID INC (CPHD): Free Stock Analysis Report

CRYOLIFE INC (CRY): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ANGO , BSX , CPHD , CRY

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