Increases in Warranty and Inventory Reserves Drive EPS Miss for Nanosphere (NSPH); Piper Jaffray Remains Neutral

Piper Jaffray maintained a Neutral rating on Nanosphere (NASDAQ: NSPH), and cut the price target to $2.00 (from $2.60), following the company's 3Q earnings report. NSPH reported a 3Q15 revenue increase of 32.5% yoy to $4.9M, in line with the Street's $4.9M estimate. Adjusted EPS of ($1.16) was below the Street ($1.02) due to a warranty and inventory reserve increases.

Analyst William Quirk commented, "Nanosphere reported a 3Q15 revenue increase of 32.5% to $4.9M, in line with the Street ($4.9M). Continued uptake and increased utilization/account of gram+, gramand enteric panels (+69% yoy) drove revenue results in the quarter. NSPH placed 26 Verigene systems, above our 25 estimate. Adj. EPS of ($1.16) was below the Street ($1.02) due to a warranty/inventory reserve increase as well as rental equipment evaluation charge. NSPH reiterated full-year revenue guidance of $18M-$20M. The Verigene Flex (next-gen system) development remains on-track with clinical trials starting by year-end. Given the ongoing cash burn, limited visibility into cash flow breakeven and concerns around the warranty reserve/GM, we remain Neutral on NSPH shares with a $2.00 PT (was $2.60)."

For an analyst ratings summary and ratings history on Nanosphere click here. For more ratings news on Nanosphere click here.

Shares of Nanosphere closed at $1.76 yesterday.

You May Also Be Interested In

• Nokia OYJ (NOKIA:FH) (NOK) PT Raised to EUR18 at JPMorgan
• Uber Inc. (UBER) PT Raised to $115 at Tigress Financial Partners
• 'Ocean of opportunity': Wolfe initiates SpaceX at Buy ahead of historic IPO