On Tuesday, Oppenheimer adjusted its outlook on shares of AngioDynamics (NASDAQ:ANGO), increasing the price target to $13 from $12 while maintaining an Outperform rating on the stock. The firm cited AngioDynamics' fourth-quarter fiscal year 2024 sales, which reached $71.1 million, marking a 1.9% year-over-year increase on a pro forma basis.
This performance aligned with expectations, particularly noting that sales in the higher margin and growth segments of MedTech were strong, while the Med Device segment was slightly below projections.
The company's NanoKnife and AlphaVac systems outperformed expectations, with NanoKnife sales up 18% and AlphaVac sales rising by 7%. The quarter also saw robust margins, with both gross margin and operating expense leverage surpassing forecasts. AngioDynamics' financial management was highlighted by the announcement of a share buyback program of up to $15 million, reflecting confidence in the company's fiscal health.
Looking to the future, AngioDynamics has several potential growth drivers. The AlphaVac system is now fully launched in the U.S. for pulmonary embolism treatment, and the NanoKnife is expected to receive an indication for prostate treatment by the end of the calendar year 2024. Additionally, the company is seeking CE Mark approval for its Auryon system in Europe.
The firm also noted AngioDynamics' ongoing efforts to expand EBITDA and its journey toward profitability, which is targeted for fiscal year 2027. The transition to a fully outsourced manufacturing model is on track and is anticipated to begin improving gross margin starting in fiscal year 2026. These strategic initiatives are part of AngioDynamics' broader plan to enhance financial performance and shareholder value.
In other recent news, AngioDynamics Inc. has been restructuring its business operations through a series of divestitures. The company's pro forma financial results, disclosed in an 8-K filing with the U.S. Securities and Exchange Commission, reveal the financial impact of these recent developments.
AngioDynamics sold its dialysis and BioSentry businesses to Merit Medical Systems (NASDAQ:MMSI), Inc. in 2023, followed by the sale of its PICC and Midline product portfolios to Spectrum Vascular in early 2024. The company also discontinued its RadioFrequency ablation and Syntrax support catheter products in February 2024.
These strategic moves are part of AngioDynamics' ongoing efforts to optimize its portfolio and concentrate on its core business areas. The pro forma results aim to provide a perspective on AngioDynamics' financials following these business sales.
InvestingPro Insights
Following the recent update by Oppenheimer on AngioDynamics, additional insights from InvestingPro suggest a mixed financial picture for the company. With a current market capitalization of $295.6 million and a negative P/E ratio of -1.54, AngioDynamics is navigating through challenging times. The last twelve months as of Q3 2024 have seen a revenue decline of 3.19%, and analysts have revised their earnings downwards for the upcoming period, indicating potential headwinds for profitability.
Still, it is worth noting that AngioDynamics holds more cash than debt on its balance sheet, which could provide financial stability and flexibility. Moreover, the company has a high shareholder yield, which could be attractive to investors seeking returns. On the flip side, AngioDynamics does not pay a dividend to shareholders, and analysts do not anticipate the company will be profitable this year.
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