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Shockwave Medical Stock Added To S&P 400 Index, Approaches New Entry
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RACHEL FOX03:45 PM ET 06/13/2022
Shockwave Medical (SWAV) stock was a big climber in 2021, rising roughly 75%. The stock hit a high of nearly 250 a share in early November, before consolidating alongside the market.
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Shockwave Medical is today's IBD 50 Stocks To Watch pick. The cardiovascular medical device company develops, manufactures and sells catheters that use sonic pressure waves to break up calcified plaque in arteries, increase blood flow and increase arterial size.
Shockwave Medical Stock Added To S&P 400 MidCap Index
In early June, it was announced that Shockwave Medical stock will be joining the S&P 400 MidCap Index on June 21, which is a positive sign for the stock.
Coming off a strong first quarter and 2021 results, Shockwave Medical stock is showing momentum as it forms a new cup base with a 223.25 buy point, according to MarketSmith chart analysis. From here, investors want to see the stock clear the breakout price in heavy volume.
This buy point was initially a handle entry from a cup-with-handle base that started forming in November of last year. But in April of 2022, the breakout didn't work out as shares dipped alongside the market.
Shockwave Medical stock is trading a solid 20% below the current buy point. Shares have a long way to go before taking out the entry. But just last week, the stock reclaimed its 200-day line for the first time since early April. Additionally, shares have been moving higher in strong volume the past few days, which is also a good sign.
Shockwave Medical Stock: New Product Boosts EPS, Sales
For its first quarter, Shockwave Medical reported revenue of $93.6 million, up 194% year over year. Earnings per share of 39 cents also showed a strong improvement from the year-ago quarter's loss of 68 cents a share. The firm has been showing profitability the past several quarters, thanks to FDA approval of Shockwave's new coronary catheter, the Shockwave C2, in February 2021. The new product triggered a turnaround for the company and a rebound from the impacts of the pandemic.
The firm credits the new product with boosting revenue growth the past several quarters to above 100%, on a year-over-year basis. Shockwave Medical stock shows triple digit revenue growth of 443%, 233%, 271% and 194% over the past four quarters, respectively.
The Santa Clara, California-based firm sees an $8.5 billion market opportunity for its intravascular lithotripsy therapies, which cause less soft tissue damage than other comparable procedures. These methods have been used for 30 years to treat kidney stones, so the technique's safety has a strong track record.
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