P/E (F1) Rel to Industry 9.42 Q1 (Current Qtr) Q2 (Next Qtr) F1 (Current Year) F2 (Next Year)
PEG Ratio 1.59 Revisions: 0 Revisions: 1 Revisions: 1 Revisions: 0
Up: 0 Down: 0 Up: 0 Down: 1 Up: 0 Down: 1 Up: 0 Down: 0
P/S (F1) 1.67
Growth Score
Proj. EPS Growth (F1/F0) -2.87% 60 30 7 Current 60 30 7 Current 60 30 7 Current 60 30 7 Current
Days Days Days Days Days Days Days Days Days Days Days Days
Hist. EPS Growth (Q0/Q-1) 0.00 Q1 -5.88% Q2 -5.26% F1 0% F2 -8.64%
Qtr CFO Growth 26.47
Momentum Score Most Accurate: 0.14 Most Accurate: 0.17 Most Accurate: 0.67 Most Accurate: 0.71
Zacks Consensus: 0.16 Zacks Consensus: 0.18 Zacks Consensus: 0.68 Zacks Consensus: 0.74
1 week Volume change 6.25%
Q1 -12.50% Q2 -5.56% F1 -1.47% F2 -4.05%
1 week Price Cng Rel to Industry 0.52%
Reported: 0.19 Reported: 0.19 Reported: 0.19 Reported: 0.17 Average 4 Qtr
Surprise
Estimate: 0.16 Estimate: 0.15 Estimate: 0.16 Estimate: 0.13
Q End 05/17 Q End 02/17 Q End 11/16 Q End 08/16
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The data on the front page and all the charts in the report represent market data as of 08/04/17, while the report's text is as of
07/20/2017
Overview
Headquartered in Latham, NY, AngioDynamics Inc. (ANGO) designs,
manufactures and sells a wide range of medical, surgical and
diagnostic devices. The company’s devices are generally used in
minimally invasive, image-guided procedures.
Net sales for fiscal 2017 were $349.6 million, down 1.2% from $353.9
million a year ago.
The Oncology/Surgery division (13.8% of net sales) includes Microwave Ablation, Radiofrequency Ablation (RFA) and NanoKnife
product lines.
Stock Performance Lacks Luster: The company saw a negative return of almost 8.6% over the last one year, as against the
Zacks classified Medical Instruments sub-industry’s gain of 9.4%. The current level is also significantly below the S&P 500’s 13.5%
gain over the same time frame. Notably, AngioDynamics is exposed to pricing headwinds stemming from lower selling prices of
peripheral vascular products due to aggressive price competition.
Risks of Supplier Business Interruptions: The company depends on third-parties and purchases significant amount of several
key products and product components from single and limited source suppliers and is expected to do so for future products as well.
Any delay in delivery or shortage in these or other products and components may interrupt and delay manufacturing of products and
result in cancellation of orders. Due to FDA norms and other business regulatory considerations, it is difficult for AngioDynamics to
be able to identify and integrate alternative sources of supply in a timely fashion. Any transition to alternate suppliers may result in
production delays and increased costs and may limit the company’s ability to deliver products.
High Debt Levels: The company ended the fourth quarter of fiscal 2017 with debt of $97.5 million. Higher debts impose certain
operating and financial restrictions which limit the company’s execution of the company’s core business strategies. Notably, if the
company’s operating results or capital resources prove inadequate, the company may face substantial liquidity problems and would
be forced to get rid of material assets or operations to meet its debt obligations. Additionally, the company would also be forced to
reduce or delay planned expansion and capital expenditures, sell assets, restructure or refinance its debt or seek additional equity
capital.
Sluggish capital-spending environment: A sluggish capital spending environment is adversely affecting AngioDynamics’ top-line
growth. Lower elective procedures along with competitive pressure on its fluid management and Venacure EVLT offerings, are also
major headwinds to the top line.
Stringent Regulatory Environment: AngioDynamics is exposed to a stringent regulatory environment. Regulatory setbacks might
dampen approvals for pipeline products, which will in turn hurt overall growth. The company is also facing regulatory delays in its
Asian markets, which is a concern.
Pricing Headwinds: AngioDynamics is exposed to pricing headwinds stemming from lower selling prices of peripheral vascular
products due to aggressive price competition. The company faces stiff competition from device makers like Boston Scientific, C.R.
Bard and Merit Medical. Moreover, despite being able to sell off a bulk of its manufactured products, pricing pressure from GPO
contracts could adversely affect selling prices and corresponding profitability of the company.
Integration Risks: AngioDynamics is on an acquisition spree which is improving its revenue opportunities on one hand but
aggravating integration risks, on the other. Frequent acquisitions can impact its balance sheet through a high level of goodwill and
intangible assets. Regular acquisitions are also a distraction for management which is likely to impact organic growth. This may limit
AngioDynamics’ future expansion and worsen the company’s risk profile, going forward.
Risks
Impressive Performance by the BioFlo Platform: Strong demand for the company’s BioFlo platform continues to drive sales.
The company is expected to continue to focus on this highly exclusive technology that offers superior outcome for patients and
economic value to healthcare system. The Endexo technology in BioFlo is expected to enhance the company’s growth trajectory.
The new BioFlo Midline catheter has gained significant traction within a short span of time owing to its easy insertion procedure
and ability to consistently and affectively draw blood over the duration of the patient’s treatment and longevity.
Strong Peripheral Vascular Business: Peripheral Vascular sales in the last reported quarter were driven by growth in the core
Angiographic Catheter business. We believe that AngioVac is also a key growth driver. Management expects the ‘Thrombus
We note that AngioDynamics is a leading player in the thrombolytic catheters space (catheter directed thrombolysis). The
company boasts highly unique catheters like Uni-Fuse, SpeedLyser and Pulse Spray under the thrombus portfolio.
A strong product line helped the company offer solutions to patients suffering from venous thromboembolism (VTE- approximately
1 million events per year in the U.S.) and varicose vein problems (approximately $80 million sales opportunity by 2020). We
believe that the recently launched second-generation AngioVac will further drive demand. Apart from this product, AngioDynamics
has an innovative pipeline that includes next generation Laser, Automated Fluid Management and Thrombus Management
products. These will further drive top-line growth over the long term.
Innovative Pipeline: AngioDynamics is a leading provider of minimally invasive medical devices used for vascular access,
surgery, peripheral vascular disease and oncology. The company’s product lines include ablation systems, fluid management
systems, vascular access products, angiographic products and accessories, angioplasty products, drainage products,
thrombolytic products and venous products. AngioDynamics continues to enjoy healthy demand for its coveted NanoKnife system
for treating tumors. Increased penetration of the device contributed to revenues in the company’s Oncology division. In fact, the
recent regulatory approval of VOLTA, a radiofrequency ablation device in Japan, is also a significant positive in our view. The
company is already looking to further broaden its commercial opportunities. Besides Germany and Denmark, the company is also
looking forward to achieve the same in Europe and the U.K. During the fourth quarter, AngioDynamics received an updated
510(k) clearance in connection with the NanoKnife System generator. In Oct, last year, the company gained approval for the
product in four Asian countries.
Changing Market Trends towards Invasive Procedures: AngioDynamics is expected to benefit from the ongoing market
transition toward less invasive interventional procedures. We expect this trend to continue, as less invasive interventional
procedures help reduce patient recovery time, thereby saving hospitalization costs. The market (vascular) served by
AngioDynamics is expected to grow. We are also impressed with the company’s expanding product pipeline (AngioVac, Bioflo
and Celerity), international market expansion opportunities and cost saving initiatives through the operational excellence program.
Strategic Tie-ups: AngioDynamics continues to expand its base on the back of acquisitions and strategic alliances. Major
acquisitions like Microsulis (2013), Navilyst (2012), Vortex Medical (2012), NanoKnife (2008) and RITA Medical (2007) have
significantly expanded its product pipeline. The takeover of Navilyst (fluid management business) and Vortex Medical (devices for
venous drainage and the removal of thrombus from occluded blood vessels) was a strategic fit for the company’s peripheral
vascular product portfolio. The acquisition of Microsulis, a provider of microwave tumor ablation technology, helped
AngioDynamics emerge as a pioneer in the global tissue ablation market. We believe that the company will continue to pursue
strategic acquisitions that will not only expand its product portfolio but also strengthen its competitive position over the long haul.
Inexpensive Valuation: AngioDynamics stock looks cheaper at the moment. A comparative analysis of the company’s P/E
(TTM basis) multiple instills confidence. The multiple currently stands at 20.62, a bit undervalued when compared with its own
range (median of 21.82) over the last one month.
Meanwhile, net sales fell almost 7% on a year-over-year basis to $86.9 million, missing the
Zacks Consensus Estimate of $91 million.
Internationally, AngioDynamics registered revenues of $16.1 million, down 9.6% year over year. However, sales in the U.S. totaled
$70.8 million, down 6.3%.
Peripheral Vascular (PV) business:Sales at this segment were $53.9 million in the reported quarter, lower than $55.6 million in the
year-ago quarter.
Despite the disappointing performance, management expects the ‘Thrombus Management’ platform in the PV product line to provide
the company with a competitive advantage and open up significant long-term opportunities.
Vascular Access (VA) business:Sales at this segment declined almost 2.2% year over year to $24.2 million, partially offset by solid
growth at BioFlo Midlines and Dialysis.
Oncology/Surgery business:Sales at this segment plunged over 33% from the year-ago quarter to $8.9 million owing to lower sales of
ablation products and NanoKnife capital.
The segment performed unimpressively primarily due to the market withdrawal of the company’s flagship Acculis Microwave Tissue
Ablation System.
The recall also affected the company’s international sales. Precisely, this had an overall negative impact of $4.5 million on earnings.
Per management, without the recall of Acculis, net revenues would have totaled $352 million, within the previously guided range.
FY17 Highlights
Net sales for fiscal 2017 were $349.6 million, down 1.2% from $353.9 million a year ago. AngioDynamics registered adjusted earnings
of $0.73 per share, up 22% on a year-over-year basis.
Per management, the year-over-year decline in sales was primarily led by unimpressive performances by the company’s VA (28.1 % of
net sales) and Oncology segments (13.8% of net sales). However, this was partially offset by growth in the PV segment (58.1% of net
sales).
In this regard, the PV segment saw a 1% rise to $208.6 million on a year-over-year basis. PV sales were driven by growth in the core
Angiographic Catheter business. However, sales at the VA and oncology segments declined 3% and 9%, respectively, on a year-over-
year basis.
Margin Details
Adjusted gross margin increased 100 basis points (bps) to 51.8% in the quarter.
Adjusted EBITDAS in the fourth quarter of fiscal 2017, excluding the items shown in the attached reconciliation table, was $15.0 million
compared with $14.2 million in the fourth quarter of fiscal 2016.
Coming to operating expenses, sales & marketing (S&M) and research & development (R&D) expenses declined 30 bps and 10 bps,
respectively, as a percentage of revenues. However, general & administrative (G&A) expenses rose 230 bps on a year-over-year basis.
Financial Condition
AngioDynamics had a strong cash flow balance in the fourth quarter. Per management, it generated $19 million in operating cash flow
and $18.3 million in free cash flow.
Additionally, AngioDynamics ended the quarter with $47.5 million in cash and cash equivalents and outstanding debt of $97.5 million.
Guidance
For fiscal 2018, the company expects adjusted earnings per share in the band of $0.64 to $0.68.
The company projects fiscal 2018 revenues in the range of $352 million to $359 million.
Recent News
On Jun 7, 2017, AngioDynamics announced FDA’s 510(k) clearance for its Solero Microwave Tissue Ablation (MTA) system. The
platform is intended to be used for the ablation of soft tissue during open procedures.
On Mar 14 2017, AngioDynamics announced it has received CE Mark certification for the Solero Microwave Tissue Ablation (MTA)
System. The Solero MTA System and Accessories are indicated for the ablation of soft tissue during open, laparoscopic or
percutaneous procedures. The Solero MTA System is not intended for cardiac use.
Value Score - -
Cash/Price 0.41 2.62 10.14 0.29 -4.35 72.31
EV/EBITDA 22.25 -1.93 12.78 16.48 -137.55 -107.22
PEG Ratio 1.59 1.11 1.99 1.11 -2.66 5.33
Price/Book (P/B) 1.15 3.21 3.22 2.70 7.75 1.99
Price/Cash Flow (P/CF) 8.89 -1.62 13.54 19.11 -11.46 18.11
P/E (F1) 23.88 -1.05 18.89 20.50 -39.84 80.00
Price/Sales (P/S) 1.67 3.82 2.50 2.28 0.88 1.16
Earnings Yield 4.21% -2.92% 5.25% 4.88% -2.59% 1.25%
Debt/Equity 0.18 0.00 0.68 0.26 1.20 0.46
Cash Flow ($/share) 1.41 -0.10 5.41 2.14 -0.06 0.29
Growth Score - -
Hist. EPS Growth (3-5 yrs) -2.87% 14.80% 7.16% 3.87% 61.90% 250.00%
Proj. EPS Growth (F1/F0) -7.31% 17.86% 9.44% 4.94% 61.90% 75.00%
Curr. Cash Flow Growth 4.32% 5.51% 5.40% 4.37% -74.26% -36.04%
Hist. Cash Flow Growth (3-5 yrs) 14.12% 9.43% 6.71% 9.75% 2.23% 7.42%
Current Ratio 2.21 2.70 1.39 3.33 1.05 2.90
Debt/Capital 15.01% 5.48% 41.54% 20.43% 54.45% 25.27%
Net Margin 2.00% -22.94% 9.92% 4.20% -8.61% -6.85%
Return on Equity 5.19% -12.47% 15.95% 12.57% -43.41% 1.42%
Sales/Assets 0.49 0.57 0.54 0.67 0.88 0.75
Proj. Sales Growth (F1/F0) 1.61% 7.80% 5.19% 32.30% 4.84% 3.40%
Momentum Score - -
Daily Price Chg 4.83% 0.00% 0.14% 0.14% 3.53% 0.00%
1 Week Price Chg 0.52% 0.18% -0.00% -1.05% -1.67% 3.56%
4 Week Price Chg 7.01% -2.73% 2.30% -6.18% -1.12% 0.00%
12 Week Price Chg 7.69% 0.00% 3.41% 2.20% 6.02% 23.08%
52 Week Price Chg 10.86% -3.44% 11.62% -9.21% -21.71% 80.64%
20 Day Average Volume 217,063 71,174 0 471,002 484,410 257,077
(F1) EPS Est 1 week change 0.00% 0.00% 0.08% 0.00% 0.00% 0.00%
(F1) EPS Est 4 week change -0.98% 0.00% 0.32% -0.39% -60.00% 0.00%
(F1) EPS Est 12 week change -0.98% -0.28% 1.00% -0.39% -287.88% 0.00%
(Q1) EPS Est Mthly Chg -5.88% 0.00% 0.00% -8.54% NA 0.00%
Agreement
This is the extent which brokerage analysts are revising their earnings estimates in the same
direction. The greater the percentage of estimates being revised higher, the better the score for this
component.
For example, if there were 10 estimate revisions over the last 60 days, with 8 of those revisions up,
and the other 2 down, then the agreement factor would be 80% positive. If, however, 8 were to the
downside with only 2 of them up, then the agreement factor would be 80% negative. The higher the
percentage of agreement the better.
Magnitude
This is a measure based on the size of the recent change in the current consensus estimates. The
Zacks Rank looks at the magnitude of these changes over the last 60 days.
In the chart to the right, the display shows the consensus estimate from 60-days ago, 30-days ago,
7-days ago, and the most current estimate The difference between the current estimate and the
estimate from 60-days ago is displayed as a percentage. A larger positive percentage increase will
score better on this component.
Upside
This is the difference between the most accurate estimate, as calculated by Zacks, and the
consensus estimate. For example, a stock with a consensus estimate of $1.00, and a most
accurate estimate of $1.05 will have an upside factor of 5%.
This is not an indication of how much a stock will go up or down. Instead, it's a measure of the
difference between these two estimates. This is particularly useful near earnings season as a
positive upside percentage can be used to help predict a future surprise.
Surprise
The Zacks Rank also factors in the last few quarters of earnings surprises. Companies that have
positively surprised in the recent past have a tendency of positively surprising again in the future (or
missing if they recently missed).
A stock with a recent track record of positive surprises will score better on this factor than a stock
with a history of negative surprises. These stocks will have a greater likelihood of positively
surprising again.
Academic research has proven that stocks with the best Growth, Value, and Momentum Growth Score
characteristics outperform the market. The Zacks Style Scores rate stocks on each of these
individual styles and assigns a rating of A, B, C, D and F. An A, is better than a B; a B is better than Momentum Score
a C; and so on.
VGM Score
As an investor, you want to buy stocks with the highest probability of success. That means buying
stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Style Score of an A or a B.