Needham Reiterates Their Buy Rating on NuVasive (NUVA)

By Jason Carr

Needham analyst Michael Matson reiterated a Buy rating on NuVasive (NASDAQ: NUVA) today and set a price target of $75. The company’s shares closed yesterday at $62.51.

Matson said:

“NUVA’s 3Q18 revenue beat while its EPS missed. Management raised revenue guidance but lowered EPS guidance. Organic growth increased to 8% in 3Q18 from 5% in 2Q18 as improved domestic growth offset slower international growth. Operating margin was 220 bps below consensus as management decided to exploit an improving spine market by reinvesting in SG&A (up 70 bps Y/Y) and R&D (up 50 bps Y/Y). Gross margin met consensus and West Carrollton remains on track to deliver 130-150 bps of margin benefit in 2019. While the margin performance is frustrating, we expect the stronger growth combined with in-sourcing to drive better margin performance in 2019 and reiterate our Buy rating.”

According to TipRanks.com, Matson is a 5-star analyst with an average return of 10.8% and a 58.2% success rate. Matson covers the Healthcare sector, focusing on stocks such as Boston Scientific Corp, Zimmer Biomet Holdings, and Wright Medical Group.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for NuVasive with a $75 average price target, representing a 20.0% upside. In a report issued on October 19, Piper Jaffray also maintained a Buy rating on the stock with a $75 price target.

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Based on NuVasive’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $15.92 million. In comparison, last year the company had a net profit of $33.62 million.

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NuVasive, Inc. engages in the development of minimally-disruptive surgical products and procedurally-integrated solutions for spine surgery. It offers cervical and spine fusion surgery, cervical plating, and posterior fixation products. The company was founded by Alexis V. Lukianov on July 21, 1997 and is headquartered in San Diego, CA.