Why NuVasive Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of orthopedic device maker NuVasive (Nasdaq: NUVA  ) plunged a whopping 33% today after forecasting third-quarter revenue well below Wall Street expectations.

So what: NuVasive shares had been soaring in 2012 on strong sales, but today's revenue warning suggests that growth is slowing much faster than expected. Management cited unusually high account churn, growing discounts from rivals, and increased denials from insurance payers for the bleak outlook, giving investors plenty of unfavorable trends to be concerned over.

Now what: NuVasive now sees third-quarter revenue of $147 million, well below its prior view of roughly $154 million and the average analyst estimate of $153.6 million. "We believe our ability to take market share with innovative procedural solutions and services remains strong," Chairman and CEO Alex Lukianov reassured investors. "We are focused on addressing the new challenges and will provide revised full year guidance on our October 29th earnings conference call." Given the long-term demographic tailwinds working in NuVasive's favor, today's huge pullback might be a good opportunity to bet on that bullishness.

Interested in more info on NuVasive? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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10/21/2016 4:00 PM
NUVA $67.42 Up +0.01 +0.01%
NuVasive CAPS Rating: *****