Cardiovascular Systems (CSII) Up 9.7% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Cardiovascular Systems (CSII). Shares have added about 9.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cardiovascular Systems due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Cardiovascular Systems Q4 Loss Narrower Than Expected

Cardiovascular Systems reported loss per share of 43 cents for fourth-quarter fiscal 2020 against earnings per share of 4 cents in the prior-year period. The reported loss however was a penny narrower than the Zacks Consensus Estimate.

Full-year loss per share was 79 cents compared with a loss of a penny a year ago.

Net Sales

Cardiovascular Systems’ revenues of $42.5 million declined 37.6% year over year. However, the top line exceeded the Zacks Consensus Estimate by 10.5%.
In fiscal 2020, revenues declined 4.6% to $236.5 million.

Segment Details

In the quarter under review, global Coronary device revenues decreased 41% year over year to $11.9 million. Domestic coronary revenues declined 44% from the year-ago period, primarily due to lower atherectomy unit volumes.

Global peripheral revenues decreased 36% to $30.6 million. Domestically, peripheral unit volumes decreased 35%.

Total U.S. revenues declined 38% to $40.5 million, while International revenues totaled around $2.1 million, a 17% decline.

Margin

Gross margin in the reported quarter was 76.2%, down 411 basis points (bps) year over year due to 40.8% fall in gross profit.

Meanwhile, selling, general and administrative (SG&A) expenses were down 20.5% to $34.9 million. R&D expenses escalated 25.1% to $11.8 million. Operating expenses overall declined 12.4% to $46.8 million. Operating loss in the reported quarter was14.4 million against operating profit of $1.3 million in the year-ago period.

Financial Position

The company exited the fiscal with cash and cash equivalents of $185.5 million, compared with $69.6 million at the end of third-quarter fiscal 2020.

Q1 Fiscal 2021 Guidance

The company provided guidance for the first quarter of fiscal 2021.Revenues are expected in the band of $55 million to $58 million, indicating sequential revenue growth of 29% to 36%.

Gross margin is expected in the range of 76% to 77%. The company expects to incur operating expenses in the range of $50 to $52 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 11.67% due to these changes.

VGM Scores

At this time, Cardiovascular Systems has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cardiovascular Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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