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Q3 Earnings Preview for AtriCure (NasdaqGM:ATRC)

in EARNINGS/INVESTING IDEAS by

AtriCure, Inc. (NasdaqGM:ATRC) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of -$0.31/share on revenue of $49.373 million. The consensus earnings per share (EPS) of -$0.31/share is based on a poll of 7 analysts and represents a growth in eps of 7.2% over the same quarter last year, when the company reported earnings of -$0.33/share.

The revenue forecast of $49.373 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −12.8%. Last year the company reported $56.614 million in revenue for the quarter.

Expected to report EPS of -$0.31/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $49.37 $56.61 −12.8%
EPS -$0.31 -$0.33 7.2%

Earnings Call Trends

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

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.54 -$0.38 29.0% Beat
Q1, 2020 -$0.40 -$0.36 10.6% Beat
Q4, 2019 -$0.40 -$0.37 6.8% Beat
Q3, 2019 -$0.31 -$0.33 -7.5% Missed
Q2, 2019 -$0.17 -$0.17 0% Met
Q1, 2019 -$0.24 -$0.20 17.8% Beat
Q4, 2018 -$0.16 -$0.21 -31.3% Missed
Q3, 2018 -$0.21 -$0.24 -14.3% 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 −7.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $45.68 $42.38 −7.2% Decline
April 29, 2020 $39.19 $43.12 10.0% Increase
February 18, 2020 $43.84 $42.17 −3.8% Decline
October 30, 2019 $27.37 $26.59 −2.8% 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 −2.59, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.59 implies a 0.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

AtriCure, Inc. is currently trading at $34.56/share, down −2.6% for the day. The company is trading at approximately 66.8% of its 52-week high of $51.76/share. The company’s stock price is down −18.5% since the last earnings report and down −9.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 28.20 suggests the company is trading in technically oversold territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:ATRC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −30.99 and a forward P/E multiple of −28.95.

AtriCure, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.73. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $34.56
P/E Ratio −31.0x
P/E Ratio (Fwd) −28.9x
PEG Ratio 0.3
Total Debt / Total Capital 4.5%
Levered Free Cash Flow -$44.424 million
EV / EBITDA −35.3x

Finbox

AtriCure, Inc. is a small-cap stock with a market capitalization of $1.553 billion and a total enterprise value of $1.395 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

AtriCure, Inc. develops, manufactures, and sells devices for the surgical ablation of cardiac tissue and systems to medical centers in the United States and internationally. The company offers Isolator Synergy and Isolator Synergy Access clamps for the treatment of persistent and long-standing persistent atrial fibrillation concomitant to other open-heart surgical procedures; EPi-Sense guided coagulation system used for the coagulation of tissue; and COBRA Fusion surgical ablation system to combine bipolar temperature-controlled radio frequency energy control with monopolar energy. It also provides multifunctional pens that allow surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation and ablate cardiac tissue with the same device; and linear ablation devices, which enable users to make longer linear lines of ablation. In addition, the company offers cryoICE cryoablation system used to ablate cardiac tissue for the treatment of cardiac arrhythmias; AtriClip system used to occlude the left atrial appendage by mechanically clamping the appendage; and CryoICE CRYO2 cryoablation system to apply cryo-energy to targeted intercostal peripheral nerves in the ribcage and temporarily relieve pain. Further, it provides Lumitip dissector to separate tissues to provide access to key anatomical structures that are targeted for ablation; Fusion Magnetic Retriever System that allows access around anatomical structures; and cardiac surgery instruments, which are used during surgical procedures for repair or replacement of certain heart valves. The company sells its products through independent distributors and direct sales personnel. The company was founded in 2000 and is headquartered in Mason, Ohio.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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