- Needham lowered AtriCure Inc's (NASDAQ:ATRC) price target to $67 from $79 due to peer multiple compression, with the Buy rating unchanged.
- The analysts write that ATRC broke out cryoSPHERE into a new Pain Management segment, which Needham expects to be a key growth driver in 2022+.
- EPi-Sense grew low-double digits in 1Q22, and management expects this to accelerate through the rest of 2022.
- Based on these two significant growth drivers, Needham believes that ATRC can grow above its historical mid-teens revenue growth rate for the foreseeable future.
- ATRC's open-heart ablation sales reached $25.5 million, up 16.4% vs. (5.9%) in 4Q21.
- Minimally invasive ablation sales of $10.1 million missed Needham's estimate of $12.3 million, up 5.1% vs. 41.8% in 4Q21.
- Pain management sales of $8.2 million grew 109.2%. Appendage management sales of $30.8 million surpassed Needham's estimate of $29.5 million and grew by 29.2% vs. 28.4% in 4Q21.
- Management expects EPi-Sense to accelerate through the year.
- ATRC's GAAP gross margin of 74.5% was down 60 bps Y/Y due to geographic mix, product mix, and increasing costs and was just above the consensus of 74.4% (ATRC's long-term gross margin target is 75%).
- Guidance: AtriCure sees FY22 adjusted EPS loss of $(1.12)-$(1.07) vs. the consensus of $(1.05).
- It expects sales of $318 million -$330 million versus the consensus of $321.65 million.
- Price Action: ATRC shares are down 0.44% at $54.39 during the market session on the last check Wednesday.
