Here's Why BioTelemetry Rose as Much as 17.5% Today

The medical-device leader announced second-quarter 2018 earnings.

Maxx Chatsko
Maxx Chatsko
Jul 26, 2018 at 3:55PM
Health Care

What happened

Shares of BioTelemetry (NASDAQ:BEAT) rose over 17% today after the company announced second-quarter 2018 earnings. The medical-device manufacturer reported record quarterly earnings of $101.4 million, record quarterly adjusted EBITDA of $29.1 million, and achieved its 24th consecutive quarter of year-over-year revenue growth.

Additionally, the company announced that it has achieved $30 million in annualized synergies following the acquisition of LifeWatch, calling it a success. With year-over-year revenue up 74%, that would be difficult to argue against.

As of 3:21 p.m. EDT, the stock had settled to an 11.6% gain.

A man sitting on the floor using his laptop with cash money falling around him.

Image source: Getty Images.

So what

BioTelemetry appears to be in the right place at the right time. It made a name for itself by developing and marketing wireless devices that monitor and diagnose cardiac arrhythmias more efficiently and cost-effectively than traditional approaches. Historically, those products have provided 85% of the company's revenue. They also caught the attention of Apple, which, in November 2017, tapped the wireless medical-device leader to take part in the Apple Heart Study. 

As second-quarter 2018 results demonstrate, BioTelemetry is firing on all cylinders right now.

Metric

Q2 2018

Q2 2017

Percentage Change

Revenue

$101.3 million

$58.1 million

74%

Gross margin

64.9%

61.9%

4.8%

Operating income

$11.1 million

$4.4 million

152%

Net income

$10.4 million

$1.7 million

512%

Source: Company Press release.

Given the company's track record of growing its business and the exciting growth opportunities ahead, including the collaboration with Apple and the launch of a new wireless device for blood glucose monitoring, investors are getting understandably excited about what's to come.

Now what

BioTelemetry is well-positioned to capitalize on market trends in wireless devices used for healthcare monitoring services. Exploiting that opportunity has earned it a $1.8 billion market valuation and what appears to be a sustainably profitable business. That said, investors will need to remain grounded to ensure that the company's valuation growth doesn't get too far ahead of realistic growth expectations.