In response to reporting first-quarter results, shares of TransEnterix (ASXC -3.15%), a commercial-stage company focused on robotic surgery, jumped 18% as of 11:05 a.m. EDT on Wednesday.
Here are the key takeaways from the company's first quarter:
- Revenue was $4.8 million. The total was comprised of $3.5 million from system sales, $1.1 million in instruments sales, and $200,000 in services. The result was ahead of the $3.8 million in total revenue that Wall Street had expected.
- Gross margin expanded to 46% during the period.
- Operating income -- yes, income -- during the quarter was $5.4 million. However, this was mostly owed to the company's decision to sell its SurgiBot system last year.
- Adjusted net loss was $11.3 million, or $0.06 per share. That was a penny better than what analysts had expected.
- Cash balance at quarter end was $94.4 million. Management expects this to be large enough to fund the business "through 2019."
- The company has sold three Senhance Systems so far in the second quarter, including one to a hospital based in the U.S.
Given the expectation-topping results and news of three more Senhance System sales, it isn't hard to figure out why shares are rising today.
I must admit that I'm highly impressed that TransEnterix has managed to sell five Senhance Systems since the start of 2018. That suggests that the pent up demand for the system is real and that at least some healthcare providers are willing to consider an alternative to Intuitive Surgical's dominate da Vinci platform. It's possible that the interest in the Senhance System will only grow from here, especially if the company succeeds in landing its label expansion claim that is currently pending FDA approval.
Analysts currently expect that TransEnterix will post $20.6 million in total revenue for all of 2018. That number is projected to jump to $41.3 million next year. If the company continues to sell systems at this rapid of a pace then it is possible that those numbers might prove to be too conservative. Any upwards revisions to those figures would likely be accompanied by continued stock price appreciation.
So are shares finally a buy with all of this good news? While I must admit that I'm no longer as bearish on this stock as I once was, I personally want to see the company produce a few more quarters like this before I'd be willing to call myself a bull.
Still, investors who have stuck with TransEnterix over the last few years should be feeling better about their investment today than they did even 90 days ago.