In its most recent earnings release, Inari Medical, Inc. (NARI) recently reported earnings that were far better than forecasted. Wall Street expected a loss of 13 cents, but the company delivered a surprise profit of 4 cents. (1) Management also lifted its sales target for the year “to a range of $490 million to $493 million, an increase of $4.5 million at the midpoint from our prior guidance range of $482 million to $492 million.” (2)
Investors might expect to see NARI’s stock price rise on the back of news like that. Instead, shares got whacked as the company announced it is acquiring privately held LimFlow, S.A., a pioneer in limb salvage for patients with chronic limb-threatening ischemia (CLTI). To make the deal happen, Inari will use cash on hand and borrowings under existing credit facilities. (3) Using cash and borrowing money sent NARI to its 52-week low of $47.81 on November 3, 2023. As we type, Inari Medical trades at $53.27.
Inari builds minimally invasive, novel, and catheter-based mechanical thrombectomy systems for the specific disease states in the United States. The company provides ClotTriever, which is designed to core, capture, and remove large clots from large vessels for treatment of deep vein thrombosis and peripheral thrombus; and FlowTriever, a large bore catheter-based aspiration and mechanical thrombectomy system to remove large clots from large vessels in the peripheral vasculature for treating pulmonary embolism and other complex venous thromboembolism cases. It serves interventional radiologists, interventional cardiologists, and vascular surgeons.
According to Transparency Market Research, the thrombectomy devices market was valued at $1.7 billion in 2022 and is expected to deliver a compound annual growth rate (CAGR) of 7.3 percent to more than $3.4 billion by 2032. (4)
A director for the medical device company decided to buy NARI stock following the freefall. Donald Miller purchased 56,100 shares at $53.44 for an investment just short of $3 million. Insiders buying NARI stock is rare. The only time insiders purchased prior to Miller’s buy was at the Initial Public Offering in May 2020 at $19 with eight executives and directors. Miller was one of the eight, acquiring 239,841 shares for $4.56 million. (5)
Between there and here, insiders unloaded more than $536 million in stock. Director Miller sold Inari 23 times between his two buys, collecting $14.56 million along the way. Analysts think he could be rewarded once again with a one-year price target of $83.10. (6) The street also expects the company to be profitable in 2024 with consensus earnings per share (EPS) projections on 36 cents with revenue rising 18.10 percent to $576.38 million from $487.90 million this year. (7).
Overall: It’s been our experience that one of the most exciting times for shareholders is when companies turn profitable following losses. Inari Medical, Inc. (NARI) appears to be on that path following a surprise profit in its most recent quarterly announcement and Wall Street’s 2024 forecast.
Market trends are positive for NARI and stock could be appropriate for investors with above-average risk tolerance and a time horizon of at least 12-18 months.
1 – https://finance.yahoo.com/quote/NARI/analysis?p=NARI
2 – https://finance.yahoo.com/news/inari-medical-inc-nasdaq-nari-231631836.html
3 – https://ir.inarimedical.com/news-releases/news-release-details/inari-medical-expands-its-patient-focused-mission-agreement
4 – https://www.transparencymarketresearch.com/thrombectomy-devices-market.html
5 – https://www.secform4.com/insider-trading/1531048-7.htm
6 – https://finance.yahoo.com/quote/NARI?p=NARI
7 – https://finance.yahoo.com/quote/NARI/analysis?p=NARI