On Thursday, BTIG adjusted its outlook on AtriCure Inc. (NASDAQ:ATRC), reducing the price target to $58 from the previous $65, while reiterating a Buy rating on the stock. AtriCure's Q1 revenue reached $108.9 million, marking a 16.4% year-over-year increase on a reported basis and 16.3% on a constant currency basis, surpassing the consensus estimate of $106.9 million.
In the U.S., Q1 revenue was reported at $90.2 million, a 15.4% year-over-year increase, slightly above the consensus of $89.5 million. International revenue also exceeded expectations, coming in at $18.6 million, which represents a 21.5% year-over-year increase on a reported basis and 21.1% on a constant currency basis, beating the consensus of $17.4 million.
The U.S. Appendage Management segment, however, fell short of expectations with Q1 sales of $35.9 million, an 11% year-over-year increase, missing the consensus target by $1 million. The segment's performance was attributed to a decline in U.S. Lariat and MIS AtriClip sales, which contributed approximately $8 million in Q1.
Despite this, the U.S. Open AtriClip segment experienced a 15.4% growth year-over-year, contributing around $28 million in Q1, with record Flex-V sales, which is believed to have exceeded consensus expectations in the face of competition.
AtriCure highlighted the full launch of Medtronic (NYSE:MDT)'s Penditure, which is now trialing nationwide. While the U.S. Open AtriClip segment performed well, the competitive landscape is expected to continue influencing ATRC shares in the upcoming quarter. Other strong performance areas included U.S. Minimally Invasive Ablation, U.S. Open Ablation, and International Appendage Management.
The company's Q1 adjusted EBITDA was $2.8 million, and the adjusted loss per share (LPS) was ($0.25), both slightly below the consensus estimates of $3.4 million and ($0.23), respectively. This was attributed to higher SG&A spending.
AtriCure has maintained its 2024 sales guidance of $459 million to $466 million, which would be a 15-17% year-over-year increase, with an adjusted EBITDA of approximately $26 million to $29 million, and an adjusted LPS of ($0.82) to ($0.74). The consensus had anticipated $461.3 million in revenue, $26.9 million in adjusted EBITDA, and an adjusted LPS of ($0.73).
InvestingPro Insights
As AtriCure Inc. (NASDAQ:ATRC) navigates a competitive landscape, recent data from InvestingPro provides a snapshot of the company's financial situation. The market capitalization stands at $1.2 billion, reflecting the scale of AtriCure within the medical device sector. Despite a significant return over the last week, with a price total return of 9.51%, analysts remain cautious, as they do not anticipate the company to be profitable this year. This aligns with the adjusted P/E ratio reported for the last twelve months as of Q1 2024 at -29.2, highlighting the challenges AtriCure faces in achieving profitability.
However, the company's liquidity appears robust with liquid assets exceeding short-term obligations, which may provide some stability in the face of operational losses. The gross profit margin remains strong at 75.26% for the same period, indicating that AtriCure is efficient in producing its medical devices, even as it operates with a moderate level of debt. These metrics, combined with the lack of dividend payments, suggest that AtriCure is reinvesting its earnings back into the company to fuel growth and manage competition.
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