Penumbra is Friday's IBD Stock Of The Day. After pulling back somewhat following a post-earnings breakout, Penumbra stock is eyeing two potential new entries.
The Alameda, Calif.-based medical company sells systems that perform computer-assisted vacuum thrombectomies. This is the process of vacuuming a blood clot from the veins and arteries. Penumbra says it's a quicker and safer process than using blood thinners to slowly dissolve a clot.
Analysts say Penumbra is gaining steam. The company beat first-quarter expectations and raised its outlook for the year. The forecast doesn't include any contribution from Thunderbolt, Penumbra's new aspiration tube. Thunderbolt is currently under Food and Drug Administration review.
On today's stock market, Penumbra stock rose 3% to close at 297.32. Shares have surged more than 27% this year.
Penumbra Stock: U.S. Thrombectomy Sales Jump
Across all products, Penumbra generated $324.1 million in March-quarter sales. Sales grew more than 16% and beat forecasts for $315.7 million. In constant currency, sales grew almost 17%.
Importantly, U.S. thrombectomy sales jumped 25% to $187.9 million. Excluding the impact of exchange rate, sales climbed 21%. That's up from 17% growth in the fourth quarter, Needham analyst Mike Matson said in a note to clients.
Embolization and access sales grew 8%, up from 5% in the December quarter. Embolization does the opposite of thrombectomy. It blocks a blood vessel to stop bleeding. It also treats cancer and aneurysms, and closes abnormal blood vessels.
Penumbra also said it earned an adjusted 83 cents per share, more than doubling year over year, and beating calls for 67 cents, according to FactSet.
Thunderbolt Could Be A 'Major' Catalyst
Penumbra reiterated its forecast for $1.34 billion to $1.36 billion in total sales. But it now expects U.S. thrombectomy procedures to grow 20% to 21%, up from its previous outlook for 19% to 20% growth.
This doesn't include any contribution from Thunderbolt, the new aspiration tubing under review.
"We expect the Thunder (study) data and Thunderbolt launch to be major catalysts for (Penumbra)," Matson, the Needham analyst, said in his report. He kept his hold rating on Penumbra stock.
William Blair analyst Margaret Kaczor Andrew expects Thunderbolt approval in the fourth quarter. She says Thunderbolt could experience a similar trajectory in the U.S. as other Penumbra thrombectomy products called Flash and Bolt. Both enjoyed 35% year-over-year growth through the first nine months of 2023.
"We continue to like the outlook this year from the combination of 1) first-quarter performance, 2) recent and upcoming next-gen launches, 3) manageable tariff exposure (100% U.S. manufacturing and near-80% domestic sales), and 4) insulated macro-related impacts from the use-case of its procedures and China less than 1% of sales," she said in a client note.
Andrew has an outperform rating on Penumbra stock.
Highly Rated Stock With Multiple Entries
Shares broke out of a double-bottom base with a buy point at 288.57 on April 24, following the March-quarter report. Then, Penumbra stock pulled back, forming a new handle. Savvy investors could use the break in the handle or a recent high of 305.74 as two potential entries.
In terms of the original breakout, shares are lingering in a buy zone that runs up to roughly 303, MarketSurge shows.
Bullishly, Penumbra stock has a near-ideal IBD Digital Composite Rating of 98. This means shares rank in the top 2% of all stocks when it comes to fundamental and technical metrics. Shares also have a strong Relative Strength Rating of 94 — a measure of 12-month performance — and an EPS Rating of 98.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
