The first quarter wasn't so bad, with NxStage Medical posting a 9% year-over-year increase in revenue. The revenue growth didn't drop to the earnings line as the company spent more on selling and marketing expenses as well as research and development. Both of those may pay off in the long run, but for now, NxStage posted a net loss of $0.02 per share, the same as in the year-ago quarter.
It's where the growth came from and expectations that fosters that's causing investors angst today. NxStage Medical has made a big push into dialysis at home, but growth for that segment came in at just 10% year over year, causing management to revise its 2017 home revenue growth target to be between 10% and 13%, down from a previous target of 15%.
The company also announced an indefinite delay in the launch of its peritoneal dialysis system that was scheduled to be launched by the end of the year. Management still thinks it can get to market before anyone else, but depending on how long the delay takes, it could have a negative impact on revenue growth next year.
While this year looks like it's going to be a bit of a disappointment for NxStage, most of that has to do with the high expectations the company set. Overall, NxStage looks well poised to take advantage of long-term growth in home dialysis. As long as it can develop new products to stay ahead of the curve, NxStage should be OK in the long run.