AngioDynamics Raised to Hold - Analyst Blog

On Mar 12, Zacks Investment Research upgraded AngioDynamics Inc. ANGO to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell).

Why the Upgrade?

This leading provider of innovative, minimally invasive medical devices for vascular access, surgery, peripheral vascular disease and oncology entered the second half of its fiscal year with strong momentum riding on a string of U.S. Food and Drug Administration (FDA) approvals for its new products.

AngioDynamics recently received the expanded FDA clearance for its AngioVac cannula and circuit which has garnered strong market acceptance across the U.S. ever since its introduction in late 2012. The company also earned an approval from FDA for its BioFlo DuraMax chronic hemodialysis catheter – a part of its BioFlo product lineup in the Vascular Access business.

On Jan 9, AngioDynamics reported its financial results for fiscal 2014 second quarter ended Nov 30, 2013. The adjusted earnings of 6 cents per share sharply lagged the year-ago earnings of 10 cents by 40% and missed the Zacks Consensus Estimate by a penny.

Following the earnings release, the company saw one downward estimate revision for fiscal 2014 leading to a 2.9% decline in the Zacks Consensus Estimate to 33 cents per share. However, due to the lack of any further downward revision, the estimates have remained the same till date. Further, AngioDynamics delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 44.4%.

Revenues inched up 2% to $88.6 million, marginally exceeding the Zacks Consensus Estimate of $88 million. Long-term debt declined to $140.2 million as of Nov 30, 2013 compared with $142.5 million as of May 31, 2013. As a result, long-term debt-to-capitalization ratio decreased 40 bps to 20.9% from 21.3% as of May 31, 2013.

AngioDynamics raised the lower end of its revenue guidance for fiscal 2014 to $349-$353 million from the prior level of $347–$353 million. However, the company retained its adjusted EPS guidance in the range of 63 to 67 cents, excluding amortization for the year.

A promising guidance, an innovative pipeline and management's efforts to leverage operational activities represent a potential upside for AngioDynamics going forward.

Other Stocks to Consider

Some better-ranked stocks worth reckoning in the medical instruments industry include Cynosure, Inc. CYNO, Natus Medical Inc. BABY and Syneron Medical Ltd. ELOS. All the three stocks carry a Zacks Rank #1 (Strong Buy).