RE: brokers on the buy side againHi,
CIBC...
Q2 estimate : total revenues / 10,777 and EPS / -0.12
Q3 estimate : total revenues / 11,949 and EPS / -0.13
Q4 estimate : total revenues / 12,706 and EPS / -0.12
Changes to our model have resulted in an improved bottom line in fiscal 2007, but only slight upward adjustments for fiscal 2008 and beyond. We reiterate our SO-S rating and 12- to 18-month price target of $5.00.
Revenues of $10.1 million (+13.5% YoY) were above forecast, mainly due to console sales (which can be lumpy). Disposables sales were close to forecast. We believe the real story this quarter were strong gross margins of 61% (vs. 54% last year), well above our 45% forecast.
CryoCath reported a solid fiscal Q1, with revenues above forecast and with improved gross margins. This, combined with R&D expenditures below our expectation, translated into a net loss of $3.5 million - nearly half the net loss we had forecast.
CryoCath provided an update on its ongoing Arctic Front "STOP AF" U.S. pivotal trial. The trial has now enrolled at least 41 patients, and remains on track to complete enrollment by Q3/07. We are very encouraged by the rapid enrollment in this study.
Overall, CryoCath put up a solid quarter, despite the restructuring of the sales force last year. While this does not have a major impact on our estimates, a good quarter, the arrival of a new CEO/CFO, and rapid enrollment in its pivotal study should go a long way towards restoring confidence in the company. We still see substantial upside in the story,and we reiterate our Sector Outperformer (Speculative) rating.