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Why Vericel Stock Is Soaring Today

By Brian Feroldi – Nov 5, 2019 at 2:35PM

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Shares jumped following upbeat third-quarter results and a guidance boost.

What happened

Shares of Vericel (VCEL -2.32%), a healthcare company focused on sports medicine and severe burn care, were up 11% as of 3:08 p.m. EST in the wake of strong third-quarter results. 

So what

The key numbers from Varicel's third quarter looked great:

  • Revenue rose 36% to $30.5 million. That was well ahead of the $26.8 million in revenue that Wall Street had expected.
  • Gross margin expanded 500 basis points to 69%.
  • Net income was $3.5 million, or $0.07 per share. That was far better than the $0.02 net loss per share that analysts were expecting.
  • Cash balance at quarter-end was $75 million.

The strong Q3 results allowed management to raise its full-year guidance. Revenue is now expected to land between $116 million and $118 million. That's above its previous guidance range of $112 million to $116 million, and also comfortably ahead of the $115.3 million that Wall Street was expecting.

Rising blue and orange stock chart

Image source: Getty Images.

Given the beat-and-raise quarter, it's not hard to figure out why the stock is flying high today.

Now what

It was a stellar quarter all around, and investors should be particularly excited by the jump to profitability. With Varicel management clearly executing well and a $2 billion addressable market opportunity ahead, this looks like a great growth stock for healthcare investors to get to know.

Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Vericel Corporation Stock Quote
Vericel Corporation
VCEL
$23.20 (-2.32%) $0.55

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