Shockwave Medical Inc (SWAV)

[Whalatane]

From Cardiovascular Mag

Shockwave Medical (SWAV)


Despite Shockwave Medical’s (NASDAQ:SWAV) decline since May 11, it’s one of my top healthcare stock picks. After the stock rallied in April on speculation about a possible Boston Scientific (NYSE:BSX) acquisition, it has come crashing down back to earth.

In July, the Centers for Medicare & Medicaid Services decided not to increase the Medicare reimbursement rate for Shockwave products. The negative news led to a stock selloff.

Despite the setback, Shockwave is in a prime position for growth. It offers intravascular lithotripsy (IVL) technology to treat calcified cardiovascular disease. Its devices help address hardened calcified plaque in arteries for patients with various heart conditions. Its technology helps to alleviate symptoms and sometimes avoid invasive interventions.

These products improve cardiovascular patient outcomes, and the company is increasing its product range and expanding globally. Furthermore, its IVL solution faces limited competition with Abbott Laboratories (NYSE:ABT) products, not expected until 2026.

That is why SWAV stock is a must-own healthcare stock. The adoption of IVL technology is driving growth, and the 49% year-over-year (YoY) revenue growth in the second quarter highlighted the robust demand. The fiscal year 2023 guidance forecasting 48% to 49% growth was equally impressive.

Besides, the recent Neovasc acquisition enables Shockwave to expand into the refractory angina market. Currently, the Neovasc Reducer System is in trials for patients with coronary obstructive refractory angina.

Lastly, in addition to the solid growth, Shockwave is highly profitable, achieving 86% gross margins in the second quarter. Despite heavy investments in its sales force expansion and growth opportunities, net income was also positive.
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Kiwi