On Wednesday, Wells Fargo adjusted its stance on Nevro Corp (NYSE:NVRO), a medical device company, by lowering the price target from $14.00 to $13.00. The firm maintained its Equal Weight rating on the stock. This adjustment follows Nevro's disclosure of its first-quarter sales figures, which surpassed Wall Street's expectations.
Nevro reported quarterly sales of $101.9 million, marking a 5.6% year-over-year increase and exceeding the Street's projection of $97.9 million. The company's performance in the United States was particularly strong, with sales reaching $87 million, outpacing the anticipated $83.6 million. International sales also exceeded expectations, coming in at $14.9 million against the forecasted $14.3 million.
The company observed some revenue shifting from the second quarter into the first, which contributed to the reported figures. Despite this, U.S. trial procedures saw a 5.1% year-over-year decline, and the number of permanent implant procedures remained relatively unchanged from the previous year. Nevro attributed these trends to reduced physician implant days, as training for their new product, Vyrsa, took precedence.
Nevro's HFX iQ, a spinal cord stimulation system, represented 58% of the total volume, which is an increase from 53% in the previous quarter. This product continues to be a significant driver of the company's performance, aligning with expectations for growth in the peripheral diabetic neuropathy (PDN) market segment.
InvestingPro Insights
As Nevro Corp (NYSE:NVRO) navigates the medical device market, recent data from InvestingPro provides a snapshot of the company's financial health and market performance. With a market capitalization of $422.94 million, Nevro's price to book ratio stands at 1.44, suggesting that the stock is reasonably valued in relation to the company's net assets. This is particularly relevant for investors weighing the company's stock price against its tangible value.
Despite the positive sales report, Nevro's price-to-earnings (P/E) ratio remains negative at -4.43, reflecting the market's anticipation of future losses or a belief that the company is undervalued. This ties in with an InvestingPro Tip indicating analysts do not expect the company to be profitable this year. Moreover, the company's revenue growth over the last twelve months was 4.63%, which, while modest, is a sign of progress in a competitive sector.
For those interested in the company's operational efficiency, Nevro's gross profit margin was a strong 68.22% over the last twelve months. This is a critical indicator of the company's ability to manage its production costs and maintain profitability on its products.
While the company is not currently profitable and does not pay a dividend, the InvestingPro Tips also highlight that Nevro holds more cash than debt on its balance sheet, which could provide some financial flexibility moving forward.
Investors seeking a deeper dive into Nevro's financials and market potential can find additional insights with InvestingPro, including a total of 7 InvestingPro Tips for NVRO, which can be accessed at https://www.investing.com/pro/NVRO. To enrich your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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