Heart Device Maker Shockwave Medical Is One Of The Best Assets In MedTech Category: Analyst

Shockwave Medical Inc SWAV shares are trading lower after the released Q3 earnings.

Q3 revenue was $186.0 million, a 42% increase, beating the consensus of $184.72 million, primarily driven by increased purchase volume of our products in the U.S. and internationally.

The gross margin percentage was 87%, compared to 86% for the three months ended September 30, 2022.

Total operating expenses were $117.9 million, a 54% increase, primarily driven by sales force expansion and higher headcount to support the growth of the business.

The company reported Q3 EPS of $0.92, beating the consensus of $0.79.

Adjusted EBITDA improved by approximately 31% to $65.0 million.

Guidance: Shockwave Medical reaffirms FY23 revenue guidance of $725 million-$730 million versus consensus of $728.85 million.

Piper Sandler attributes the falling share price to a top-line beat that fell short of investor expectations, the lack of a guidance raise, and some ongoing concerns related to China and the U.S. peripheral business. 

The analysts Adam Maeder and Simran Kaur acknowledge these headwinds bear monitoring but view these dynamics to likely be transitory, and SWAV’s decision to flag them for investors was prudent. 

Piper reaffirms that SWAV is one of the best assets in the MedTech category—offering investors a unique combination of top-line growth, margins, and profitability at a palatable valuation. 

Price Action: SWAV shares are down 16.9% at $179.27 on the last check Tuesday.