This medical instrument company handily beat earnings estimates for the last quarter, and analysts have increased their forecasts four times in the past 30 days.
Vascular Solutions (VASC)
from The Periscope Report
Vascular Solutions (VASC) clobbered estimates, exactly as we predicted and the company also raised its guidance for the 2nd quarter in a row.
Vascular Solutions makes catheters and guidewires that are used in vascular surgery. Over the last ten years, VASC has introduced 80 new products, which have made tremendous inroads against much larger competitors like Medtronic and Boston Scientific, which speaks to the quality of VASC products. An exciting new product, freeze-dried plasma, will hit the market in 2019, which could easily double the size of the company.
After the 2Q closed, management raised its guidance for fiscal year 2015, the 2nd straight quarter management raised guidance. Revenue guidance was increased to a range of $145 - $147 million, up from prior guidance of $140 - $144 million and earnings guidance was raised to a range of $1.00 - $1.04 per share, up from prior guidance of $0.93 - $0.97 per share.
On a Non-GAAP basis, Net Income increased 39% to $5.6 million, after increasing 20% YoY in the prior quarter. Net Income was up 36% sequentially. Net earnings increased to $0.29 per share, up from $0.21 per share a year ago, and up from $0.21 per share in the prior quarter. VASC clobbered the mean estimate for $0.25 per share.
Going forward in R&D, there are nine new products scheduled for release before the end of 2015. In addition to these nine new products, VASC has a deep pipeline of more than 40 new medical device projects in various states of development for launches scheduled starting in 2016.
CFO James Hennen thinks he can push the operating margin up to 25% - 27% within three to four years as sales approach $200 million. The current market opportunity for VASC’s eight top-selling products is $250 million.
This was a great quarter. VASC has six new products that will grow in the double digits for the next three years. It has another nine new products in development. It spends 12% of revenue on R&D. Buy the stock now and hold on for 10 years of strong growth.
Tom Byrne, The Periscope Report, 4025 Sunset Ridge Drive, Canyon Ferry Crossing, Helena, MT 59602, 406-465-4663, July 2015