Sell Remaining Half of EverQuote (EVER)
I don’t love how EverQuote (EVER) has acted after reporting after the close on Monday. Shares had a great day Tuesday, gave it back Wednesday, and traded lower yesterday (when most of the rest of the market was rallying). Today, shares of EVER slipped below their 50-day line. This relative weakness, in the face of a rebounding market and after a big Q2 beat, suggests to me that there is more concern about the reliability of the revenue trend in the back half of the year and about the impact of the regulatory changes discussed when I reviewed the company’s quarter. It may also be that the recent storms on the East Coast are reminding investors that hurricane season will be here soon, and that might cause insurance carriers (EverQuote’s biggest customers) to pull back on their auto insurance marketing spend to “save up” for any losses. Either way, we’ve done well here (EVER +60% since we jumped in in February). Let’s call it good and book the gain. SELL
Artivion (AORT) Delivers Q2 Beat
Shares of Artivion (AORT) should have a decent day following another solid quarterly report. This is a steady growing MedTech company focused on aortic disease that has a good portfolio now and is likely to have a much stronger one in the years ahead.
On to the quarter ... revenue grew by 9.8% to $98 million (1.4% beat) while adjusted EPS grew 16.7% to $0.07 (beat by $0.11). Management increased the low end of full-year guidance by $2 million into a range of $388 - $396 million (+10% to 12%). Guidance for adjusted EBITDA growth also went up at the low range by $1 million to $69 - $72 million (+28% to 34%).
In terms of the pipeline, the big attraction is the NEXUS aortic arch stent graft system, which is owned by partner Endospan (Artivion has a deal to acquire it upon U.S. FDA approval). NEXUS allows for aortic arch disease patients with aneurysms and dissections to avoid open chest surgery (multi-week recovery) and instead have a minimally invasive endovascular procedure (walk out of hospital next day). Management sees a global revenue opportunity of $600 million from NEXUS alone (roughly 1.5x this year’s estimated company-wide revenue).
NEXUS is being studied in the U.S. IDE TRIOMPHE trial which should be fully enrolled by the end of 2024 (50 of 60 patients enrolled) and is expected to be approved in the back half of 2026.
Beyond NEXUS, much of the conference call revolved around expansion of the rest of the portfolio in Latin America and APAC, sales force efficiency, continued market share gains with current products, and other factors that should drive consistent double-digit growth with earnings growing about 2x the rate of revenue.
Overall, another good quarter. We’ve seen AORT stock jump after the last three earnings reports and while I’m not anticipating a blastoff rally today (though it would be nice) I do expect shares to have a positive reaction to the report. BUY
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