Cerus Shares Plunged: What You Need to Know (CERS)

Cerus Shares Plunged: What You Need to Know

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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 medical device developer Cerus (Nasdaq: CERS ) was in need of an optimism transfusion today after shares dropped as much as 16% after the company reported fourth-quarter results.

So what: For the fourth quarter, Cerus' revenue jumped 18% from 2009 to $6.5 million, which was above $6 million that analysts were expecting. The company's per-share net loss also improved, from $0.13 last year to $0.06 this time around. The bottom line also topped analysts' estimates. Good news so far, right? Unfortunately, the company blew it when it said revenue will only grow around 20% in 2011, which would put it well short of Wall Street's expectations.

Now what: Since the company is continuing development and seeking approval for its blood-safety systems -- and, therefore, still reporting losses and cash burn -- Cerus is a speculative situation that's not suitable for all investors (and not a stock I'd put my own money into). However, for those that are taking a flyer on the stock, there's definite potential if it can bring its full vision to the commercial market. Today's news is certainly a setback, but it may just be a flesh wound.

Want to keep up to date on Cerus? Add it to your watchlist.

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