On Sep 24, we issued an updated research report on NuVasive, Inc. NUVA. The company continues to witness strength in the global business. However, persistent decline in product prices due to intense competition in the spine market is a concern. NuVasive currently carries a Zacks Rank #3 (Hold).
Over the past three months, NuVasive has underperformed its industry. The stock has lost 6.7% against the industry’s 7.4% rise.
NuVasive exited the second quarter of 2020 with lower-than-expected revenues. NuVasive witnessed a significant fall in elective procedure volumes in the second quarter due to the pandemic. The company noted that the fall in procedure volumes in April (the hardest-hit month in the quarter) was in line with its expectation. The company performed disappointingly across geographies and segments.
The contraction in gross margin and operating loss is concerning as well. The company has been unable to provide any annual guidance, which raises apprehensions. Consistent pricing pressure and a poor solvency structure are also discouraging. Macro-economic headwinds and a stiff competitive landscape have been dampeners as well.
NuVasive, Inc. Price
NuVasive, Inc. price | NuVasive, Inc. Quote
On a positive note, NuVasive is currently leaving no stone unturned to capture the fast-growing spine market. The company, in July, launched its Time to Evolve campaign to help provide less invasive surgical techniques. NuVasive also expanded its complex spine portfolio with the global commercial availability of Reline 3D (a posterior fixation system for patients suffering from pediatric spinal deformities) in June.
It is also on track to commercially launch an interior cervical plate and posterior cervical fixation system to help treat degenerative trauma and deformity pathologies by the end of the year. Additionally, NuVasive will continue its momentum in transforming the TLIF market by entering into alpha launches for coherent TLIF O and TLIF A.
Further, despite the pandemic dragging down international revenues in the last reported quarter, the company registered solid performance in Australia, New Zealand, and parts of Northern Europe and Japan throughout the quarter.
Also, the company witnessed volume improvement throughout the second quarter. Additionally, NuVasive Clinical Services continued to drive business and operational efficiencies during this time.
Key Picks
Some better-ranked stocks from the broader medical space are QIAGEN N.V. QGEN, Thermo Fisher Scientific Inc. TMO and Hologic, Inc. HOLX.
QIAGEN’s long-term earnings-growth rate is estimated at 22.3%. It currently sports a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings-growth rate is estimated at 15.5%. It currently sports a Zacks Rank #1.
Hologic’s long-term earnings-growth rate is estimated at 15.5%. The company presently carries a Zacks Rank #1.
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