AngioDynamics, Inc.’s ANGO investors have been experiencing some short-term losses from the stock of late. Shares of the Latham, NY-based medical technology company have plunged 13.8% in the past three months, underperforming the industry’s 0.3% gain. In the same time frame, the stock underperformed the sector’s decline of 2.2% and the S&P 500’s 6.9% growth.
Two major developments from ANGO this month include the announcement of its first-quarter fiscal 2025 results and the grant of Category I CPT for Irreversible Electroporation (IRE) for the treatment of lesions in the prostate and liver by the American Medical Association’s (AMA) CPT Editorial Panel. The decision by the AMA CPT Editorial Panel will likely facilitate reimbursement for healthcare providers performing IRE ablation procedures and enable broader access to the NanoKnife System for patients.
Although the company witnessed strength in its overall net sales and Med Tech net sales during the fiscal first quarter, its Med Device net sales declined. Continued pressure arising from inflationary costs on raw materials, labor shortages and freight costs negatively impacted gross profit during the reported quarter. This resulted in the decline in ANGO’s overall gross profit during the quarter despite being offset by sales volume, price and product mix.
The recent decline signals rising investor apprehension surrounding the company’s continued navigation through the choppy inflationary business environment.
ANGO Three Months Share Price Comparison
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Over the past three months, the stock’s performance has remained bleak, unlike its peers like Boston Scientific Corporation BSX and Abbott Laboratories ABT. BSX shares have rallied 14.5%, while ABT shares have gained 7.7% in the same time frame.
ANGO expects revenues for fiscal 2025 in the band of $282 million-$288 million, representing growth of 4.2-6.4% from fiscal 2024. The Zacks Consensus Estimate for fiscal 2025 revenues is currently pegged at $284.1 million, indicating a 6.5% plunge from the comparable fiscal 2024 period.
Despite the potential within the cardiovascular market driven by a growing addressable market, the downward estimates indicate that the company might not be able to overcome the negative market momentum any time soon.
AngioDynamics’ transformative medical technology focuses on restoring healthy blood flow in the body’s vascular system. The company is currently expanding cancer treatment options and improving patients’ quality of life.
During the first quarter of fiscal 2025, AngioDynamics continued to focus on executing key commercial initiatives, and the progress is evident so far. Given this, the stock seems well-positioned to navigate through the current macroeconomic climate.
ANGO’s Strong Fundamentals Weigh In
AngioDynamics is consistently witnessing strong market acceptance of its NanoKnife system for treating tumors. On the research and development front, the company continued to focus investments on its three key technologies, AngioVac, Auryon and NanoKnife, while working on ways to improve the profitability of its other products.
On the first quarter of fiscal 2025earnings call management stated that ANGO launched the Auryon 1.7mm catheter during the quarter. For AlphaVac, the company is currently executing a full commercial launch of pulmonary embolism (PE) indication in the United States and countries accepting the CE mark.
In September, the company submitted a 501(k) application seeking clearance for its NanoKnife System for the ablation of prostate tissue in an intermediate-risk population, supported by results from its Pivotal Study of the NanoKnife System for Ablation of Prostate Tissue in an Intermediate-Risk Patient Population (PRESERVE). Management remains optimistic about receiving an FDA clearance in prostate around the end of this calendar year. AngioDynamics also plans to commercially launch NanoKnife for prostate following approval.
AngioDynamics’ International Operations
On the fiscal first-quarterearnings call management stated that the vast majority of AngioDynamics’ growth in the quarter was in the United States. With respect to AlphaVac, management has started to witness contribution from the launch in Europe. However, the company expects the United States to continue to be the biggest driver of growth for AlphaVac in the near-term.
ANGO, with the aim of supporting longer-term growth in Europe, launched the RECOVER-AV clinical trial in mid-September. The trial is designed to assess the safety and efficacy of AlphaVac for the treatment of acute intermediate risk PE in the European market.
Another notable development for AngioDynamics was the receipt of the European CE mark approval for its Auryon Atherectomy System in September. This regulatory approval allows ANGO to market the Auryon System in Europe for the treatment of Peripheral Artery Disease, including Critical Limb Ischemia and In-Stent Restenosis. The company is currently in a limited market release in Europe for Auryon and expects this geography to account for a low-single-digit percentage of total Auryon revenues for the fiscal year.
ANGO’s Stock Valuation
ANGO’s forward 12-month P/S of 0.9X is lower than the industry’s average of 4.5X and its five-year median of 1.5X.
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Estimate Movement
Estimates for AngioDynamics’ fiscal 2025 earnings have remained constant at a loss of 41 cents over the past 60 days.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Our Final Take
There is no denying that AngioDynamics sits favorably in terms of core business strength, earnings prowess, robust financial footing and global opportunities. The Zacks Rank #2 (Buy) stock’s strong core growth prospects present a good reason for existing investors to retain shares for potential future gains despite the current slump in share prices. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For those exploring to make new additions to their portfolios, ANGO currently has a Zacks Growth Score of B. However, as it is currently valued slightly lower than the broader market, it suggests further potential for growth for its closer alignment with overall market performance.
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