Leerink Partners Cut Price Target on Cardiovascular Systems (CSII) Following Disappointing 2Q and 3Q Guidance
Leerink Partners maintained a Market Perform rating on Cardiovascular Systems (NASDAQ: CSII), and cut the price target to $13.00 (from $17.00), following the company's 2Q earnings report. For F2Q16, CSII reported sales of $41.4M, ~$2M below consensus. Also, management guided F3Q16 revenues well below consensus, yet again, at $40.5M-$42.0M vs. the Street at $46.1M. The guidance indicated what appears to be a more protracted impact than originally expected from the ongoing salesforce transition and optimization.
Analyst Danielle Antalffy commented, "Last night, CSII reported another disappointing quarter, as salesforce optimization issues continue to pressure growth in what is already an increasingly competitive market with the advent of drug coated balloons (DCB). For F2Q16, CSII reported sales of $41.4M (-7.5% y/y) -- ~$2M below us and consensus. Perhaps even more importantly, management guided to F3Q16 revenues well below us and consensus yet again -- $40.5M-$42.0M vs. our $46.6M estimate and the Street at $46.1M -- indicating to us what appears to be a more protracted impact than originally expected from the ongoing salesforce transition and optimization. Because of this, we now expect CSII sales to continue to come under pressure in the back half of the year with a now projected nearly 10% sales decline vs. our prior low-singledigit growth projection. And while a FY2017 rebound seems feasible, the timing and extent of any such rebound -- which not only depends upon management and salesforce execution but also an evolving competitive landscape -- remains unclear. Shares could remain under pressure for another quarter or 2 until investors begin to see tangible benefits from the recent salesforce adjustments, as this remains a "show-me" story, in our view."
For an analyst ratings summary and ratings history on Cardiovascular Systems click here. For more ratings news on Cardiovascular Systems click here.
Shares of Cardiovascular Systems closed at $12.46 yesterday.