A Mostly Clean Quarter Drives A Better Valuation For AngioDynamics

At least some of the sharp decline in AngioDynamics (NASDAQ:ANGO) after its disappointing fiscal first quarter report in October of 2022 could be tied to fears that there was another shoe to drop, and likewise, the solid rebound in the shares on basically in-line fiscal second quarter results likely has at least something to do with relief that there were no similar surprises this time around. With that, the shares are up a strong 20% since my last update.

It doesn't take particularly demanding assumptions to get to a $20-plus fair value for AngioDynamics (35%-plus upside from here), and there are legitimate growth opportunities here. There are still risks, though, including a single-digit revenue growth rate that falls short of what the Street often demands of smaller med-tech names and a history of inconsistent execution on once-promising opportunities in a range of markets. In my last article, I acknowledged that it was likely futile to downgrade when the damage had already been done; while I do still see upside here (potentially meaningful upside), another quarter of in-line or better results would be welcome.

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A Mostly Clean Quarter Drives A Better Valuation For AngioDynamics