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Cardiovascular Systems Q1 Earnings: Buying Soaring NasdaqGS:CSII Stock Before Call?

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Cardiovascular Systems, Inc. (NasdaqGS:CSII) is scheduled to report Q1 earnings results on November 4, 2020.

The company is expected to report earnings of -$0.21/share on revenue of $56.51 million. The consensus earnings per share (EPS) of -$0.21/share is based on a poll of 6 analysts and represents a decline in eps of -23.5% over the same quarter last year, when the company reported earnings of -$0.17/share.

The revenue forecast of $56.51 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −12.4%. Last year the company reported $64.49 million in revenue for the quarter.

Expected to report EPS of -$0.21/share for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $56.51 $64.49 −12.4%
EPS -$0.21 -$0.17 -23.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, missed 4 quarters, and met expectations 1 quarter.

What are your expectations from Cardiovascular Systems, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 -$0.45 -$0.43 4.7% Beat
Q3, 2020 -$0.07 -$0.08 -14.3% Missed
Q2, 2020 -$0.03 -$0.10 -233.3% Missed
Q1, 2020 -$0.09 -$0.17 -80.9% Missed
Q4, 2019 $0.04 $0.04 0.0% Met
Q3, 2019 -$0.03 $0.02 161.5% Beat
Q2, 2019 -$0.04 $0.01 126.3% Beat
Q1, 2019 -$0.06 -$0.09 -63.6% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $31.25 $30.74 −1.6% Decline
May 5, 2020 $39.75 $38.37 −3.5% Decline
February 5, 2020 $43.41 $41.86 −3.6% Decline
October 29, 2019 $48.60 $43.43 −10.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.71, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.71 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Cardiovascular Systems, Inc. is currently trading at $36.28/share, down −5.1% for the day. The company is trading at approximately 65.9% of its 52-week high of $55.22/share. The company’s stock price is up 18.0% since the last earnings report and down −2.6% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 56.34 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:CSII Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −53.72 and a forward P/E multiple of −88.50.

Cardiovascular Systems, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.44. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $36.28
P/E Ratio −53.7x
P/E Ratio (Fwd) −88.5x
PEG Ratio 0.0
Total Debt / Total Capital 1.4%
Levered Free Cash Flow -$16.134 million
EV / EBITDA −64.4x

Finbox

Cardiovascular Systems, Inc. is a small-cap stock with a market capitalization of $1.534 billion and a total enterprise value of $1.323 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Cardiovascular Systems, Inc., a medical device company, develops and commercializes various devices to treat peripheral and coronary artery diseases in the United States. The company offers peripheral artery disease products, which are catheter-based platforms to treat a range of plaque types in above and below the knee leg arteries, including calcified plaque, as well as address various limitations related with surgical, catheter, and pharmacological treatment alternatives; and peripheral support products. It also provides Diamondback 360 Coronary orbital atherectomy systems (OAS), a coronary artery disease (CAD) product designed to facilitate stent delivery in patients with CAD who are acceptable candidates for percutaneous transluminal coronary angioplasty or stenting due to severely calcified coronary artery lesions. The company was founded in 1989 and is headquartered in St. Paul, Minnesota.

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