Markets

Why Sientra Is Flying High Today

What happened

In response to the company reporting upbeat third-quarter earnings, shares of Sientra (NASDAQ: SIEN) a medical aesthetics products maker, rose 27% as of 3:17 p.m. EST on Friday. 

So what

Here's a look at the key numbers from the company's third quarter:

  • Revenue increased 33% year over year to $22.4 million. This was a few million dollars above what Wall Street was expecting.
  • Gross margin dropped by 560 basis points to 56.5%. 
  • Net loss rose to $22.4 million, or $0.45 per share. This was below the $0.49 net loss per share that market watchers had predicted.
  • The cash balance at quarter-end was $121 million. 
Surgeon with mask on standing in room

Image source: Getty Images.

Management boosted its full-year sales guidance, too. Revenue is now expected to land between $82.5 million and $83.5 million. This represents growth of 22% at the midpoint and is above its prior range of $79 million to $83 million. It's also ahead of the $81.9 million that analysts were expecting.

Given the expectation-topping results and guidance boost, it's not hard to figure out why shares are flying high.

Now what

The aesthetics market is huge and growing quickly, so there's no doubt that companies like Sientra have a big opportunity ahead of them. However, I find Sientra's large net loss worrisome, especially since its cash balance is dwindling.

Sientra might prove to be an attractive growth stock in time, but my view is that the risks are still too high. That's why my plan is to keep this company on my radar and follow its progress with great interest.

10 stocks we like better than Sientra
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Sientra wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 1, 2019

 

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

In This Story

SIEN

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More