NEW YORK (TheStreet) -- Endologix (ELGX) shares are down 20.6% to $10.53 on Monday, a new low for the year, after the medical device manufacturer reported its third revenue guidance below analysts expectations while also lowering its full year revenue expectations.
The company expects third quarter revenue of $37 million this year, while analysts are expecting third quarter revenue of $37.6 million.
The company also lowered full year revenue guidance to between $145 million and $148 million, down from its previous estimates between $148 million and $152 million.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates ENDOLOGIX INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENDOLOGIX INC (ELGX) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 258.6% when compared to the same quarter one year ago, falling from $5.67 million to -$8.99 million.
- Net operating cash flow has significantly decreased to -$7.18 million or 521.11% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of ENDOLOGIX INC has not done very well: it is down 17.09% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- ENDOLOGIX 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENDOLOGIX INC continued to lose money by earning -$0.25 versus -$0.61 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings (-$0.28 versus -$0.25).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ENDOLOGIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ELGX Ratings Report