Shares are down -1.4% to $32.65 in pre-market trading today.
The firm believes that the medical device manufacturer's margins will show stress as revenue growth slows in the coming months.
TheStreet Ratings team rates NUVASIVE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NUVASIVE INC (NUVA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NUVA's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, NUVA's share price has jumped by 45.48%, exceeding the performance of the broader market during that same time frame. Although NUVA had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- NUVASIVE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NUVASIVE INC increased its bottom line by earning $0.16 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.16).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 2247.6% when compared to the same quarter one year ago, falling from $0.85 million to -$18.28 million.
- Net operating cash flow has declined marginally to $23.30 million or 3.34% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NUVASIVE INC has marginally lower results.
- You can view the full analysis from the report here: NUVA Ratings Report