Yahoo Finance Inari Medical (NARI) Up 4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Inari Medical, Inc. (NARI). Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Inari Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Inari Medical Q4 Earnings Improve Y/Y, Gross Margin Down
Inari Medical reported adjusted earnings per share (EPS) of 5 cents in the fourth quarter of 2023 against the year-ago period’s loss of 11 cents per share. The Zacks Consensus Estimate for EPS was pegged at 1 cent. On a GAAP basis, the company recorded a loss per share of 8 cents. There was no adjustment in the prior-year period.
Revenues in Detail
Inari Medical registered revenues of $132.1 million in the fourth quarter, up 22.6% year over year. The figure matched with the Zacks Consensus Estimate.
Full-Year Results
Inari recorded total revenues of $493.6 million in 2023, up 28.7% year over year. In 2023, the loss per share was 3 cents compared with 55 cents per share in the prior year.
Q4 Highlights
During the reported quarter, NARI completed its acquisition of LimFlow. This system allows for the transcatheter arterialization of the deep veins and is indicated to treat patients with chronic limb-threatening ischemia.
On the fourth-quarter earnings call, management also continued to make progress across the six products that are in full market release in the second half of 2023. Three of these products, REVCORE, InThrill and ProTrieve, add direct incremental revenue opportunities. Management also confirmed gaining good initial traction and is receiving excellent clinical feedback across all three products.
Per management, Inari Medical witnessed another quarter of record case and revenue production outside of the United States. Its performance was driven primarily by increased adoption in Western Europe, complemented by solid case growth in its early-stage markets in Latin America, Canada and the Asia-Pacific. The company continues to make good progress in both China and Japan and anticipates beginning to treat patients in both these markets in 2024. Management expects its international business could represent more than 20% of total revenues over time on the back of unmet needs.
Margin Trend
In the quarter under review, Inari Medical’s gross profit improved 21.6% to $115.1 million. The gross margin contracted 70 basis points (bps) to 87.1%.
Selling, general and administrative expenses rose 26.7% to $101.5 million. Research and development expenses increased 12.1% year over year to $22.9 million. The operating expenses of $124.4 million increased 23.7% year over year.
The operating loss totaled $9.3 million compared with the operating loss of $5.9 million in the year-ago period. Excluding acquisition-related costs of $7.7 million and acquired intangible asset amortization of $1.3 million, adjusted operating loss during the quarter was $0.3 million.
Financial Position
Inari Medical exited fourth-quarter 2023 with cash and cash equivalents and short-term investments of $116.1 million compared with $351.3 million at the end of the third quarter.
Cumulative net cash provided by operating activities at the end of fourth-quarter 2023 was $35.9 million against cumulative net cash used in operating activities of $14 million in 2022.
Guidance
Inari Medical has issued its financial outlook for 2024.
For 2024, the company expects revenues in the range of $580 million-$595 million, reflecting growth of 17.5%-20.5% in 2023. The Zacks Consensus Estimate stands at $589.9 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -182.76% due to these changes.
VGM Scores
Currently, Inari Medical has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Inari Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Inari Medical is part of the Zacks Medical - Instruments industry. Over the past month, Tandem Diabetes Care, Inc. (TNDM), a stock from the same industry, has gained 33%. The company reported its results for the quarter ended December 2023 more than a month ago.
Tandem Diabetes Care reported revenues of $196.8 million in the last reported quarter, representing a year-over-year change of -10.8%. EPS of -$0.27 for the same period compares with -$0.01 a year ago.
For the current quarter, Tandem Diabetes Care is expected to post a loss of $0.79 per share, indicating a change of -25.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Tandem Diabetes Care has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Inari Medical, Inc. (NARI) : Free Stock Analysis Report
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