Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Shares of Spectranetics Corp Crashed Today

By Brian Feroldi - Jul 24, 2015 at 11:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Disappointing guidance for the rest of the year caused shares of Spectranetics to fall hard.

What: Shares of medical device maker Spectranetics (NASDAQ: SPNC) fell more than 29% this morning after the company lowered its revenue guidance for the rest of 2015 when it reported second quarter results last night.

So what: Revenue for the company grew a strong 42% year-over-year, but the majority of that growth was related to last year's acquisition of AngioScore for its cardiovascular surgery device AngioSculpt. Excluding the acquisition, revenue grew a more modest 9% after adjusting for currency fluctuations. Earnings per share landed at -0.22 for the quarter, which was ahead of the -0.31 loss that analysts were expecting. 

The company noted that competitive pressure is causing AngioSculpt to perform below original expectations, and lowered revenue guidance for the year to a range of $240 million to $250 million, down from its previous guidance of $258 million. On the plus side, GAAP estimated net loss for the year was reduced to a range of $65 to $69 million from the previous $78 to $82 million, though on a Non-GAAP basis the net loss for the year is expected to remain unchanged at $41 to $45 million.

Now what: Investors in growth companies like Spectranetics rarely look kindly on lowered revenue expectations, especially while the company is still operating at a loss. This huge movement today also follows a large share price drop after the company reported disappointing results last quarter as well.

While the company is certainly taking actions to try and reinvigorate sales of AngioSculpt, the rapid adoption of competitive products is a worrying sign for the future of AngioScult, and the market is hammering the stock accordingly. Investors may be wise to sit on the sidelines to see if the company's actions prove to be successful before they consider buying shares on this dip.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
633%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.