PEN - A Leaner AngioDynamics Is A High-Risk Execution-Driven Story

2024-04-09 16:49:42 ET

Summary

• AngioDynamics has sold low-growth businesses, shifted to an outsourced manufacturing model, and refocused on cardiovascular and oncological care for potential growth.
• The recent approval of the AlphaVac F18 mechanical thrombectomy system for pulmonary embolism presents a significant opportunity in a large ($2B+) and growing market.
• The company's historical execution challenges raise concerns, but there is potential for a stronger, more profitable AngioDynamics if products like Auryon, AlphaVac, and NanoKnife are successful.
• Progress toward double-digit adjusted EBITDA margins in four or five years can support a fair value of $10 today, but this is a highly speculative call.

I can't say that I have a lot of regrets about expressing my concerns in October 2023 that AngioDynamics, Inc. ( ANGO ) is an execution-challenged med-tech story with a real value-trap risk. With the shares basically flat since my last update (including a recent +30% move from the lows), wait-and-see observers may have missed the bottom, but haven't really underperformed overall....

For further details see: