VapoTherm (NYSE:VAPO) shares fell this morning on third-quarter results that came up short of the consensus forecast.
The Exeter, New Hampshire-based company posted losses of $91.8 million. That equals 98¢ per share on sales of $13.55 million for the three months ended Sept. 30, 2022.
VapoTherm registered a massive bottom-line slide deeper into the red on a sales decline of 64.5%. The company attributed year-over-year revenue declines as the Delta variant of COVID-19 drove demand for the company’s products this time last year. That failed to repeat in the three-month period this year.
The company’s losses per share of 98¢ came in 20¢ behind expectations on Wall Street. Analysts projected revenues of $13.54 million.
“Our revenue increased sequentially from the second quarter to the third quarter which is not typical given the seasonality in our business,” VapoTherm President and CEO Joseph Army said in a news release. “Growth was driven primarily by consistent monthly improvement in U.S. disposables turn rates … and the ongoing launch of our new product platform HVT 2.0.”
“We are on track to complete the move of operations to Mexico by year-end which we believe will improve our gross margins to 60% once we work through our higher costed inventory and initial production builds,” he continued.
Vapotherm expects a net revenue range between $64 million and $66 million. The previous guidance fell between $75 million and $81 million. Its guidance reflects a light flu season which typically begins in the fourth quarter in the U.S. The guidance does not reflect any significant COVID-19 impact.
Analysts unsure on VapoTherm
BTIG analyst Marie Thibault maintained her “Neutral” rating on VapoTherm. Its guidance, among other issues, offset positive news in its third-quarter results, she said.
“We remain concerned with the revenue covenant overhang, the need to quickly convert inventory to cash, and long-term efforts needed to reach profitability,” wrote Thibault.
Shares of VAPO dipped 21.8% at $1.65 apiece in early-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — fell by 4%.