Earnings Updates: Shockwave (SWAV) Remains a HOLD. TaskUs (TASK) Moves to SELL.
Shockwave Medical (SWAV) crushed expectations in Q1 and raised full-year guidance. Revenue was up 193% to $93.6 million and beat by $9.4 million. GAAP EPS of $0.39 beat by $0.25. Both Coronary and Peripheral surpassed results, though Coronary ($57.9 million vs. $22.9 million for Peripheral) remains the far larger of the two businesses as Shockwave’s C2 continues to roll out in the U.S. These were great results despite some softness early in the quarter due to Omicron. Full-year guidance goes up by $30 million to a range of $435 - $455 million (+83% to +92%). Expansion overseas is ongoing with Japan and China set to launch this year (will take time to ramp). The newer iteration of Shockwave’s peripheral tech, the M5+, is moving from soft launch to full launch (M5+ is faster, gets to more areas of the body and can treat larger diameter vessels than previous technologies). Overall a good quarter with more to come throughout the year. Shares of SWAV are trading up today and this result should be enough to keep the bears at bay. That said, I’ll keep at hold given the broader weakness in the market. HOLD
TaskUs (TASK) surpassed expectations delivering Q1 revenue of $239.7 million (+57%), beating by $8.9 million, and adjusted EPS of $0.34, which beat by $0.03. Management left the outlook unchanged as it cited some uncertainty from fintech customers and a faster than expected offshoring trend with its largest customer, which is leading to lower billing rates. That said, TaskUs still added 5,700 net new employees this quarter and sees adding 16,000 this year, so this is far from a shrinking business. It’s more a reallocation of resources. All things considered, I’m still moving TASK to sell today. Shares dipped below support a couple days ago and. in this environment, I suspect investors will feel no urgency to buy names where management has cited any uncertainty for the balance of the year. Best to move to the side and keep an eye on TASK for now. SELL