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Cardiovascular Systems (CSII) Coronary Arm Grows, Margin Dips

Cardiovascular Systems, Inc. CSII has been pursuing product improvements, as well as evaluating new technologies in a bid to strengthen and broaden its portfolio of powerful micro-invasive tools. The stock currently carries a Zacks Rank #3 (Hold).

Coronary franchise registered solid performance on a strong procedure volume domestically, increased sales of procedure support products, and growing adoption of orbital atherectomy internationally.

The company’s third-quarter fiscal 2021 international revenues increased 20.5% year over year led by strong growth in Japan banking on successful Orbital Atherectomy System (OAS) launches three years back. Cardiovascular Systems received the CE Mark for coronary OAS in January and is employing the same launch approach in Europe. Despite the pandemic, the company launched coronary system in six European countries in less than two months.

Cardiovascular Systems, Inc. Price

Cardiovascular Systems, Inc. Price

Cardiovascular Systems, Inc. price | Cardiovascular Systems, Inc. Quote

The company is progressing well with its objective to introduce OAS globally. In this regard, Cardiovascular Systems is progressing well under its partnership with OrbusNeich per which the latter distributes the company’s coronary and peripheral orbital atherectomy systems in multiple countries outside the United States and Japan.

The company is currently working with regulatory authorities regarding the launch of the WIRION Embolic Protection System and will begin offering peripheral support devices in the fourth quarter of fiscal 2021.

On the flip side, the company’s third-quarter fiscal 2021 loss was wider than the year-ago figure as well as the consensus mark. Revenues missed the Zacks Consensus Estimate but improved on a year-over-year basis.

Peripheral revenues were flat as patients with claudication continued to defer evaluation and treatment. Peripheral units sold to hospitals declined 6% due to ongoing deferral of treatment for claudication. Gross margin contraction was deterring as well. Continued net operating loss does not bode well for the company. A tough competitive landscape and the company’s failure to expand business overseas are other headwinds.

Over the past three months, Cardiovascular Systems has underperformed the industry. The stock has lost 9.1% compared with the industry’s 2.5% fall.

Stocks Worth a Look

A few better-ranked stocks from the broader medical space are National Vision Holdings, Inc. EYE, Boston Scientific Corporation BSX and Envista Holdings Corporation NVST, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

National Vision has a projected long-term earnings growth rate of 23%.

Boston Scientific has a projected long-term earnings growth rate of 9%.

Envista Holdings has an estimated long-term earnings growth rate of 26%.

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