Lackluster Growth And Margins Remain Major Issues For AngioDynamics

In med-tech, you had better either have robust revenue growth or solid margins or the market isn’t going to want to have much to do with you. That’s been the issue for AngioDynamics (ANGO) for some time, predating COVID-19 by years, and it’s harder to stick with the argument that the latest collection of products is going to meaningfully change that long-term pattern.

I can understand why investors might be bullish on products like AngioVac, Auryon, and NanoKnife, as well as the potential for better share in vascular access, and think that this time will be different. Unfortunately, limited marketing capabilities are an issue, and while products like AngioVac do indeed offer good growth, it’s off a low base and the core business just isn’t all that attractive. Although mid single-digit revenue growth and longer-term FCF margins in the low-to-mid teens could support a good total return from here, I believe AngioDynamics is going to need to provide visibility on a path to double-digit EBITDA margins before the Street is going give a meaningfully better multiple to the shares.

 

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 Lackluster Growth And Margins Remain Major Issues For AngioDynamics