Coveted “Beat and Raise” results will fuel future share price growth.
Maci growth exploding; Epicel growing steadily.
Profit margins improving, cash pile remains awe-inspiring, TAM adjusted upward.
Share price digesting earnings day 50% moonshot; holding onto support line and poised to make more gains.
Side hustle: Biolife Solutions, which transports Vericel’s lab-grown tissue, is a fast-growing “pick and shovel” play in the burgeoning regenerative medicine industry.
On November 6, Vericel Corporation (VCEL) reported third quarter earnings, and to say that it was a home run is not an exaggeration: MACI growth is exploding, Epicel is growing briskly, both revenue and EPS soundly beat estimates, profit margins are improving, and the company raised guidance. It was a coveted “Beat and Raise,” and the stellar results took the market by surprise; the share price closed up 44% on the day, and at one point was at a one-day gain of almost 50 percent. It was a performance worthy of the Great Bambino himself. In this article, I will discuss these third quarter positives and more and then, consult my crystal ball for a technical examination of the price chart (hint: It’s showing a major breakout).
If you are new to Vericel, you may wish to read my first article on the company, located here, as it provides an introduction to its products and business model.
Revenue: Strong Increases for Both Products
Revenue for the third quarter was $22.5 million, an increase of 58% yoy. That is impressive growth and it is $4.36 million (19%) more than analysts were expecting. What we are seeing is the initial fruits of the labor of the 12 additional MACI sales reps who hit the streets on April 1, 2018. In the conference call, CEO Nick Colangelo commented, “Our third quarter results demonstrate our ability to rapidly recruit, train, and effectively deploy new [sales] representatives.”
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