LeMaitre Vascular’s Lack Of Near-Term Catalysts Pushes Stifel To The Sidelines

LeMaitre Vascular Inc (NASDAQ: LMAT) reported Q1 results, which led to a 14.6 percetn sell-off.

The Analyst

Stifel analyst Rick Wise downgraded LeMaitre from Buy to Hold and reduced his price target from $40 to $34.

The Thesis

Although LeMaitre’s management remained steadfast and confident in the company’s ability to drive 10 percent revenue growth and 20 percent operating income growth over the long term, there is a lack of clear-cut near-term outperformance drivers, Wise said in a note.

Outlining the concerns, the analyst said growth of XenoSure, accounting for 20 percent of LeMaitre’s sales, has moderated.

Additionally, the analyst noted the company missed top-line estimates four of nine times, with three consecutive misses across the past three quarters, with an average revenue miss of 0.4 percent.

The analyst believes it would take several quarters, if not most of 2018, before the growth concerns can be addressed, restoring confidence in the company’s outlook and leading to a more meaningful stock price appreciation.

Reviewing the results, Stifel said Q1 revenues missed the consensus and the management’s guidance. Beyond the 500-basis point forex tailwind, pricing contributed 300 basis points to topline growth, while unit volume remained flat, the firm said.

Price Action

LeMaitre shares had gained about 23 percent in the year-to-date period.

Reacting to the earnings, the stock was down 14.7 percent to $33.24.

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