Hansen's Hampered (HNSN)

Hansen's Hampered

Hansen Medical (Nasdaq: HNSN ) saw revenue grow 139% year over year during the quarter, but when a company is in the early start-up phase, it's quarter-over-quarter growth that counts. Hansen's stock today is following its quarter-over-quarter revenue growth: down.

The robotic catheter maker's revenue decreased quarter over quarter because it only sold 279 disposable catheters versus 401 in the first quarter. Hansen doesn't think this was because doctors are performing fewer procedures, but just the lumpiness of sales. A few large orders can throw off the quarterly numbers when you've only got 30 or so customers.

Hansen's bigger problem is that the growth of system sales seems to be slowing down a bit -- it sold the same number of systems in the second quarter as it did in the first quarter. That's no way to run a business, especially when system sales will drive catheter sales and service revenue in future quarters.

	Q1 2007	Q2 2007	Q3 2007	Q4 2007	Q1 2008	Q2 2008
Number of Sensei systems sold	0*	4	5	6	8	8

Source: Company press releases.*Two systems were shipped in Q1 2007 but were recognized as revenue in Q2 2007.

It's going to have to pick up the pace of system sales if it wants to catch rival Stereotaxis (Nasdaq: STXS ) .

Hansen is guiding for another 28 to 34 sales in the second half of the year and it's already shipped at least two of them, so systems sales are far from stagnant if the company can hit its goal. It's recently upped its capacity to be able to crank out five systems per month, so if the sales force can sell them, the company should be able to ship them.

Founder Frederic Moll certainly hopes he can repeat his previous success and make Hansen the next Intuitive Surgical (Nasdaq: ISRG ) , a company he helped co-found, but the company is going to have to convince doctors that its machines will make the procedure to correct cardiac arrhythmia safer or more effective -- as Intuitive Surgical has done with its prostatectomies.

I'm willing to give the Rule Breakers pick a pass this quarter, but investors should keep Hansen on a short leash and cut it loose if it doesn't look like the company is getting it done.

More high-tech Foolishness:

Best Odds in the Universe!
If you're interested in a 98.79% chance at beating the market... and a 70.84% chance at DOUBLING the market's return – Motley Fool Supernova could be just what you're looking for. And get this: We arrived at these odds from 10,000 random back-tested portfolios composed of Motley Fool Co-founder David Gardner's personal stock picks.

It's why David recently handpicked a small team of world-class portfolio managers. You see, he thinks these odds can get even better! And he'd like to prove it to you...

Simply enter your email address. And the answer to the question everybody is asking will be delivered to your inbox!

Find out why the Motley Fool Rule Breakers newsletter picked both Hansen and Intuitive Surgical by grabbing a 30-day trial subscription. You'll get access to all the current thinking on these two companies as well as the most recent picks.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On August 03, 2008, at 9:59 AM, ahrahr wrote:

I notice the Fool is now starting to distance itself from HNSN.
It was about time.
It's more than a year that serious investors know STXS is the winner in this race.
Just look at the safety profile.
HNSN has a 6-8% rate of adverse events, on a few thousands procedure.
STXS has 0.1% out ot 15,000 procedures, and counting, to date.
Why analysts didn't ask questions re the safety profile during the last cc?
I'm afraid the Fool did not do its due diligence on HNSN and relied instead on hype (such as Fred Moll, HNSN founder, is the same guy that founded ISRG - but he is not the guy that took ISRG to success!).
Regards.
Report this Comment On August 03, 2008, at 7:10 PM, Lfierz wrote:

Well, I agree with ahrahr, and whats more, I told the fools so some two and one years ago. STXS has installations in many top institutions of the world, while HNSN has none.
Medicine always goes after the leading institutions and whoever has them behind him will win the game. HNSN is doomed.
L.F., M.D.
Report this Comment On August 06, 2008, at 4:58 PM, Ganndalf wrote:

I think both of you guys are off the mark. This is not an either-or situation. It's a "both-and".
Sorry to disappoint you, but STXS and HNSN both are going to find a place in this industry and do well. :P
You are making apples/oranges comparisons with HNSN/STXS. I guess that's not relevant for some people, though.
Both STXS and HNSN recognized revenue on 8 systems this quarter. And HNSN shipped two more in that quarter that they had not yet recongized revenue on.
Duke University Medical Center was one of the U.S. buyers for Hansen this quarter. I think that counts for something. I guess a top institution is defined as a hospital that has a Niobe installed. lol
Intuitive Surgical had plenty of nay-sayers back in 2000 as well. Or perhaps they are just hard-core STXS fans. Hard to factor out investor bias in homo sapiens.
I say buy both!
:)

updated 7 hours ago Sponsored by:
	DOW	12,874.04	72.81	0.57%
	S&P 500	1,351.77	9.13	0.68%
	NASD	2,931.39	27.51	0.95%

HNSN	$3.51		-0.17	-4.62%
Hansen Medical		CAPS Rating:

STXS	$0.80		+0.04	+5.19%
Stereotaxis, Inc.		CAPS Rating:

ISRG	$503.07		+12.24	+2.49%
Intuitive Surgical		CAPS Rating:

9

Hansen's Hampered

Comments from our Foolish Readers

Report this Comment On August 03, 2008, at 9:59 AM, ahrahr wrote:

Report this Comment On August 03, 2008, at 7:10 PM, Lfierz wrote:

Report this Comment On August 06, 2008, at 4:58 PM, Ganndalf wrote:

Add your comment.

Compare Brokers

Report This Comment

Sending report...

Today's Market

Create My Watchlist

You don't seem to be following any stocks yet!

Most Popular Articles

Related Tickers