Tuesday, October 6, 2015

Seeking Alpha: After Some Turbulence, NuVasive Appears To Be On A Better Flightpath

I've liked NuVasive (NASDAQ:NUVA) for some time now, and the company's share price performance (up 12% from my last article in March, and up 48% since this article in the summer of 2014) has given me no cause for regrets. While the company has seen plenty of turmoil, including major departures of "C-suite" executives, the basic plan of driving increased market share, increased overseas sales, and better margins seems very much intact.

I continue to believe that NuVasive has a strong future. Minimally invasive procedures should continue to gain share within the large spinal procedure market, and I see little evidence that NUVA is losing its edge in terms of innovation and product development. The company does have the significant challenge of striking the right balance between growth-supportive spending and improved margins, but I think it has a credible plan to achieve both. M&A remains a big wildcard, both in terms of who/what NuVasive may buy and who may try to buy NuVasive.

A relative outperformer in a tough market, NuVasive doesn't leap out to me as a cheap stock today, but then again high-quality med-tech growth seldom sells cheaply. A mid-$50s fair value still looks reasonable on an EV/revenue basis, but the volatility of these shares may argue for a wider-than-average margin of safety for new buyers.

Read more here:
After Some Turbulence, NuVasive Appears To Be On A Better Flightpath

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