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Why Sientra Is Flying High Today

By Brian Feroldi - Nov 8, 2019 at 4:15PM

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Shares pop after the company reports impressive third-quarter results.

What happened

In response to the company reporting upbeat third-quarter earnings, shares of Sientra (SIEN -6.67%) a medical aesthetics products maker, rose 27% as of 3:17 p.m. EST on Friday. 

So what

Here's a look at the key numbers from the company's third quarter:

  • Revenue increased 33% year over year to $22.4 million. This was a few million dollars above what Wall Street was expecting.
  • Gross margin dropped by 560 basis points to 56.5%. 
  • Net loss rose to $22.4 million, or $0.45 per share. This was below the $0.49 net loss per share that market watchers had predicted.
  • The cash balance at quarter-end was $121 million. 
Surgeon with mask on standing in room

Image source: Getty Images.

Management boosted its full-year sales guidance, too. Revenue is now expected to land between $82.5 million and $83.5 million. This represents growth of 22% at the midpoint and is above its prior range of $79 million to $83 million. It's also ahead of the $81.9 million that analysts were expecting.

Given the expectation-topping results and guidance boost, it's not hard to figure out why shares are flying high.

Now what

The aesthetics market is huge and growing quickly, so there's no doubt that companies like Sientra have a big opportunity ahead of them. However, I find Sientra's large net loss worrisome, especially since its cash balance is dwindling.

Sientra might prove to be an attractive growth stock in time, but my view is that the risks are still too high. That's why my plan is to keep this company on my radar and follow its progress with great interest.

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Stocks Mentioned

Sientra, Inc. Stock Quote
Sientra, Inc.
$0.98 (-6.67%) $0.07

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