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Why AtriCure Inc. Shares Jumped

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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 AtriCure (NASDAQ: ATRC  ) , a global medical device company that focuses on providing cardiac surgical ablation systems, jumped as much as 14% after reporting better-than-expected third-quarter results and boosting its full-year forecast.

So what: For the quarter, AtriCure delivered a 24.8% increase in revenue to $20.1 million -- $15.8 million of that coming from the U.S. -- as its adjusted loss per share narrowed to $0.13 from $0.16 in the year-ago period. Gross margin also improved by 130 basis points to 72.9%. Comparatively speaking, Wall Street had been forecasting just $18.1 million in revenue and a loss of $0.16 per share. Looking ahead, AtriCure's management boosted its full-year revenue guidance higher to $80 million from a previous outlook of $77 million to $78.5 million and is projecting adjusted EBITDA losses of $4.5 million to $5.5 million including the negative impact of the medical device excise tax.

Now what: Unfortunately, I'm witnessing more and more instances recently of very intriguing companies on paper that are still years away from producing profitable results. AtriCure certainly has a diverse product lineup that could definitely benefit from further international exposure, but it's likely two years or more away from achieving breakeven results. Until I see discernible improvement in AtriCure's bottom line, I plan on remaining nothing more than a spectator.

A profitable company with amazing potential
AtriCure may offer niche products, but it lacks one component most investors look for: profits. By contrast, there is an incredible tech stock out there that is profitable and growing twice as fast as Google and Facebook, and more than three times as fast as and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

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9/29/2016 1:05 PM
ATRC $15.45 Down -0.37 -2.34%
AtriCure CAPS Rating: *****