What happened
Shares of BioTelemetry (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.
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.
