Orthofix Medical (Nasdaq: OFIX) are up today on fourth-quarter results that topped the consensus forecast.
The Lewisville, Texas–based company posted losses of $22.2 million in the quarter. That equals 59¢ per share on sales of $200.4 million for the three months ended Dec. 31, 2023. The company’s bottom line dipped by more than $15 million further into the red on 64% sales growth.
Adjusted to exclude one-time items, earnings per share came in at 3¢. That landed 11¢ ahead of expectations on Wall Street. Sales also topped projections as analysts forecasted $195.3 million in revenue.
By midday trading today, OFIX shares were up more than 11% to $14.26 apiece. MassDevice‘s MedTech 100 Index was up slightly.
The company saw growth across segments, with Bone Growth Therapies sales ticking up 13.5%. The biggest change, though, came in Spinal Implants, Biologics and Enabling Technologies, which grew 152.4% year-over-year. Global Spine grew 78.8%, and Global Orthopedics grew 7.2%.
“We are pleased to report another quarter of strong performance as Orthofix completes its first full year as a combined company with SeaSpine. We delivered accelerated growth exiting 2023 and demonstrated resilience, increased internal efficiencies and cost synergies,” said Massimo Calafiore, who took over as president and CEO of Orthofix in January. “I am thrilled to join Orthofix at such a pivotal moment in the company’s story, wherein the business fundamentals are strong, we are well positioned to deliver profitable growth in 2024, and we are continuing to accelerate our leverage on revenue.
“After reflecting on my first two months in this role, it is evident that Orthofix’s balanced and complementary product mix offers a differentiated advantage across multiple markets. I look forward to leveraging that unique portfolio platform to drive future value through profitable growth.”
Orthofix expects net sales between $785 and $795 million for 2024, marking growth between 5% and 7%.
Shares of OFIX fell 2% at $12.75 apiece in pre-market trading today. However, once the market opened, investors reacted more positively, with shares ticking up nearly 6% to $13.74 apiece.
The analysts’ view
Ryan Zimmerman and Iseult McMahon of BTIG pointed to encouraging steps for Orthofix over the past few months, namely with key leadership changes. However, one potential reason for the early-morning stock dip could be the company’s guidance. The analysts say the outlook for 2024 comes in below consensus estimates.
But, that may not prove too much of an issue for Orthofix.
“While [below-consensus guidance is] usually not a good thing, we believe in the context of new [management] and a depressed stock value, this is the first step needed…reset numbers and then go execute above and beyond them,” the analysts wrote.
Zimmerman and McMahon say it remains too early for an “all clear signal” but they see a positive first step for Orthofix. It was only in September 2023 that the company fired three executives with cause, including its CEO, leading to Calafiore’s appointment.
The analysts maintain a “Neutral” rating.
“We think investors will want to see more product drivers as we get into FY24 to feel more confident in numbers moving higher but with operating expenses coming down and adj. EBITDA margins coming up, we’re incrementally more optimistic on [Orthofix’s] prospects,” the analysts wrote.