Achieving success as a growth investor revolves around picking companies that are taking new and potentially winning approaches to solving existing problems. These businesses can take their place as disruptors in a particular market, which can fuel growth in revenue and profits.
Minimally invasive medical devices maker AngioDynamics (ANGO 0.52%) may be such a company. Let's dive into its fundamentals and valuation to find out whether its stock is a buy for growth investors.
The medtech segment is powering growth
Due to its modest $365 million market capitalization, AngioDynamics flies under the radar of most investors. But since its founding in 1988, the company's cutting-edge innovations used to treat cancer and peripheral vascular disease have won favor and recognition among radiologists and surgeons.
The most prominently featured products within AngioDynamics' portfolio are in its medtech segment, including Auryon, the AlphaVac System, and NanoKnife. Auryon treats peripheral artery disease. The AlphaVac System is used to address blood clots.
NanoKnife is a minimally invasive therapy for patients with late-stage or inoperable cancers. Unlike other localized treatments that use thermal energy, the non-thermal energy of this treatment is so precise and versatile that it doesn't damage the structural integrity of the tissue that it targets. This means that NanoKnife can kill cancer cells without many of the health complications that result from other treatments, which is how it delivers optimal health outcomes to patients.
AngioDynamics' net sales increased by 4.7% over the year-ago period to $91.1 million during its fiscal fourth quarter of 2023, which concluded on May 31. The medtech segment continued to drive top-line growth for the company, posting $26.5 million in net sales in the quarter -- a 17.2% year-over-year growth rate. Together with the 0.3% growth in the med device segment's net sales to $64.6 million for the quarter, this produced mid-single-digit total net sales growth.
The fast-growing medtech segment is becoming a more important part of AngioDynamics' sales mix. This is why it's reasonable to expect high-single-digit annual revenue growth from the company for the foreseeable future.
AngioDynamics' non-GAAP (adjusted) diluted earnings per share (EPS) doubled to $0.02 during fiscal Q4. The company recorded an adjusted diluted loss per share of $0.06 in its fiscal year 2023. But as it launches more products and keeps growing the top line, AngioDynamics could deliver full-year profits to shareholders as soon as fiscal 2025.
Image source: Getty Images.
Big product launches in the works
Speaking of product launches, AngioDynamics has two that could be especially promising. The company is targeting a launch date in the second half of calendar 2024 for its AlphaVac System to treat patients with pulmonary embolisms. For context, a pulmonary embolism is a blood clot in the lungs that affects 1 in 1,000 Americans annually.
AngioDynamics also expects to launch its NanoKnife treatment for prostate tissue by the end of 2024. For perspective, prostate cancer is the second most common cancer among men in the United States, trailing only non-melanoma skin cancer.
The stock looks to be undervalued
In shedding 35% of its value so far in 2023, AngioDynamics has greatly lagged the broader market. Its price-to-book ratio of 1 is now below its 10-year median of 1.2. But with the company's decent fundamentals, this could be a value opportunity for growth investors willing to be patient enough for coming product launches to bear fruit.
