Investors in AngioDynamics (ANGO +4.39%), inventor of the innovative Nanoknife device for electrocuting cancer cells, got an unpleasant shock of their own on Friday morning. Though the company reported a smaller adjusted loss than had been forecast for its fiscal 2024 second quarter, it also reported smaller than expected revenues, and offered worse guidance for the rest of its fiscal year.
As of 3 p.m. ET, AngioDynamics shares were down by 21.1%.
NASDAQ: ANGO
Key Data Points
AngioDynamics earnings and sales
For the period, which ended Nov. 30, AngioDynamics' sales grew by less than 3% year over year to $79.1 million, missing Wall Street's consensus estimate of $82 million. The company also suffered a small decline in gross profit margins, from 51.7% in the prior-year period to 50.9%.
The worst news of all, of course, was that despite the positive gross profit margin, on the bottom line, AngioDynamics lost a lot of money. Management noted that its adjusted loss for the quarter was $0.05 per share -- better than the loss of $0.07 per share that Wall Street analysts had predicted. The company's actual loss on a generally accepted accounting principles (GAAP) basis, however, was a huge $0.72 per share -- more than three times last year's fiscal Q2 loss.
Should you sell AngioDynamics stock?
The news got even worse from there.
Management said it is engaged in a "strategic transformation" to restructure its manufacturing process to emphasize outsourced production of its products, with the aim of lowering costs so that it can "generate meaningful long-term growth and profitability." The turnaround, however, if it even happens, will not be immediate.
Shifting to guidance, AngioDynamics management warned that its adjusted losses this fiscal year will range from $0.35 per share to $0.42 per share -- the entire range of which implies worse losses than previously expected. And since we've seen that AngioDynamics' GAAP losses are coming in much worse than its adjusted losses already, this implies that the GAAP loss for the year could be larger than the adjusted losses the company is warning about.
With AngioDynamics now looking certain to report its fifth straight year of losses, and with analysts forecasting at least two more years of losses ahead, it may be time for investors to finally throw in the towel and sell the stock.
