NuVasive Posts Strong Q2 Results; Provides Guidance for 2021

Stock Market

NuVasive (NUVA) reported better-than-expected second-quarter results on impressive revenue growth during the quarter. The medical technology company engages in developing, manufacturing and selling of procedural solutions for spine surgery. 

Adjusted earnings came in at $0.60 per share and surpassed the consensus estimate of $0.44. Also, it compares favorably with a loss of $0.40 per share reported in the year-ago quarter.

The company reported Q2 net revenues of $294.8 million, up 43.3% (on a constant currency basis) from the previous year’s quarter. It came above $285.6 million estimated by the analysts. NuVasive is said to have benefitted from recovery across all procedural segments and continued strong international growth. (See NuVasive stock chart on TipRanks)

Adjusted gross margin came in at 73.6%, compared to 60.5% in the same period last year. The improvement was driven by incremental inventory reserves taken in the second quarter of 2020 due to pandemic-related impacts.

The CEO of NuVasive, J. Christopher Barry, said, “Our continued investments in the cervical and anterior procedural segments and our international commercial organization are advancing both our near- and long-term growth strategy.”

The company also provided outlook for full-year 2021. It expects adjusted earnings per share in the range of $2.25 to $2.35, while net sales is anticipated to be between $1.19 billion and $1.21 billion.

Following the results, BTIG analyst Ryan Zimmerman reiterated a Hold rating on the stock. The analyst noted, “Encouragingly, mgmt. noted a DD increase in surgeons trained Q/Q, with 2Q demand exceeding 2Q19 levels, which suggests increasing adoption over the next 1-2 Qs. However, we continue to think that NUVA is in transition, as contributions from key products are further out.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 5 Buys, 4 Holds and 1 Sell. The average NuVasive price target of $75.78 implies 15.9% upside potential.

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