Seeking Alpha: LDR Holdings Has To Reestablish Its Growth Cred

Sometimes it's more that a company missed than by how much they missed. Take the case of small-cap spinal care company LDR Holdings (NASDAQ:LDRH). The market reacted very badly to the company's October third quarter pre-announcement, even though the magnitude of the miss was just 2% relative to the Street's expectations. Institutions hate to see a revenue miss so early into the launch of a major product (the Mobi-C cervical disc, in this case), though, and with so much of the value tied to revenue and profit targets far in the distance, even a small course correction can lead to a much bigger correction in the share price.

When I last wrote about LDR Holdings, I noted that this was a high-risk situation and those risks have certainly manifested themselves with the shares down about a third in the past three months. I still do believe that insurers are going to get on board with two-disc procedures and that greater adoption of LDR Holdings' less-invasive technologies can drive long-term revenue growth in the mid-teens. The decline in the share price has pulled the stock below my DCF-based fair value and that's pretty rare for a growth med-tech. There are still definitely risks here, as investors are going to be very sensitive to any sign of further disappointment in growth, but for investors who can take the risk this is a name worth some due diligence.

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LDR Holdings Has To Reestablish Its Growth Cred