Nevro (NVRO) Q2 Loss Narrower than Expected, Revenues Beat

Nevro Corp NVRO reported second-quarter 2020 loss of $1.21 per share, narrower than the Zacks Consensus Estimate of a loss of $1.65. The company had incurred a loss per share of 91 cents in the year-ago quarter.

Revenues of $56.4 million surpassed the Zacks Consensus Estimate by 36%. The figure however fell 39.7% year over year owing to the impact of COVID-19-related government restrictions on elective procedures implemented globally.

Quarter Highlights

In the quarter under review, international revenues were $5.4 million, down 65% year over year at constant currency.

U.S. revenues for the quarter totaled $51 million, down 35% year over year. Per management, this downside was due to decline in U.S. trials of about 37% and drop in permanent implants of around 34% during the second quarter due to the pandemic.

Margins

Gross profit totaled $35.3 million, down 44.9% year over year. Gross margin was 62.5%, down 583 basis points.

Total operating expenses fell 21.9% year over year to $70.6 million.

Loss from operations was $35.4 million, wider than the year-ago quarter’s loss of $26.6 million.

Nevro Corp. Price, Consensus and EPS Surprise

 

Nevro Corp. Price, Consensus and EPS Surprise

Nevro Corp. price-consensus-eps-surprise-chart | Nevro Corp. Quote

Guidance

Due to the continued economic uncertainties resulting from COVID-19, Nevro has not issued any guidance for 2020.

Summary

Nevro exited the second quarter on a strong note. The company saw sequential improvements in U.S. case volumes in May as well as June. In the month of June, daily U.S. trial and permanent procedure volumes were almost equal to the prior-year period. Reduction in operating expenses is encouraging. The commercial launch of the Senza Omnia SCS System continues to buoy optimism.

However, the company’s domestic and international revenues declined on a year-over-year basis. Contraction in gross margin is worrying. Operating loss also widened in the quarter under review.

Zacks Rank and Key Picks

Nevro currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and OPKO Health, Inc. OPK. While OPKO Health carries a Zacks Rank #2 (Buy), the other two sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

OPKO Health reported second-quarter 2020 EPS of 5 cents against the Zacks Consensus Estimate of a loss of 7 cents per share. Revenues of $301.2 million surpassed the consensus estimate by 28.4%.

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