On Friday, Oppenheimer maintained a positive stance on AngioDynamics (NASDAQ:ANGO), reiterating an Outperform rating with a $13.00 price target. The firm's stance comes after the company's shares experienced a downturn following the fiscal first quarter 2025 results announced on Thursday.
The sales figures reported were slightly below expectations, with $67.5 million compared to the anticipated $67.9 million, attributed to lower international medical device sales due to distributor timing issues. However, this was largely compensated by robust performance in the Auryon product line, which saw a 24.9% increase, and AlphaVac, which grew by 21.1%.
Despite concerns over the company's cash burn, which was approximately $21 million for the quarter, Oppenheimer pointed out that the first quarter typically sees the highest cash use for AngioDynamics. Moreover, the first quarter of fiscal 2025 showed an improvement compared to the same quarters in the previous two fiscal years.
The guidance for the full fiscal year 2025 cash burn remains at $10 to $15 million, aligning with expectations. Additionally, the gross margin for the first quarter was reported to be better than anticipated.
The company's pipeline appears to be advancing as scheduled. Notably, the Auryon product received the CE mark during the first quarter, allowing it to enter the European Lower Market Register.
Furthermore, AlphaVac, which is designed for pulmonary embolism treatment, is now undergoing feasibility market research in both the United States and Europe. Lastly, AngioDynamics has submitted a filing to the FDA for the NanoKnife's prostate indication, with approval expected by the end of 2024.
In other recent news, AngioDynamics reported a slight 1.1% year-over-year increase in revenue for the first quarter of fiscal year 2025, totaling $67.5 million. The company's MedTech segment, including Auryon and AlphaVac products, saw a near 9% revenue boost, despite a 4% decline in the Med Device segment.
AngioDynamics also announced its transition to outsourced manufacturing, which is projected to result in significant annual savings by fiscal 2027.
In terms of product performance, Auryon registered a 25% revenue growth due to new product launches and market expansion in Europe. However, NanoKnife revenue dipped by 6.9% due to a strong comparison from the previous year. AngioDynamics reaffirmed its revenue guidance for fiscal year 2025, which is expected to fall between $282 million and $288 million.
These developments reflect recent changes in the company's operational strategy and market dynamics. Despite the mixed performance across different segments, AngioDynamics remains confident about its market momentum and future growth prospects. The company is also optimistic about achieving cash flow positivity by fiscal year 2026, as indicated by its management team.
InvestingPro Insights
Recent InvestingPro data provides additional context to AngioDynamics' financial situation and market performance. The company's market capitalization stands at $241.77 million, reflecting its current market valuation. Despite Oppenheimer's optimistic outlook, AngioDynamics faces some financial challenges. The company's revenue for the last twelve months as of Q1 2025 was $292.73 million, with a concerning revenue growth decline of -12.85% over the same period.
InvestingPro Tips highlight that AngioDynamics holds more cash than debt on its balance sheet, which could provide some financial flexibility as the company navigates its cash burn concerns. Additionally, the stock's RSI suggests it may be in oversold territory, potentially indicating a buying opportunity for investors who share Oppenheimer's positive outlook.
It's worth noting that analysts do not anticipate the company to be profitable this year, aligning with the reported operating loss and negative EBITDA. However, the company's high shareholder yield and liquid assets exceeding short-term obligations may offer some reassurance to investors.
For those seeking a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide deeper insights into AngioDynamics' financial health and market position.
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