Shockwave Medical is the IBD Stock Of The Day. With expectations for double-digit growth in the June quarter, SWAV stock is making a run at a breakout.
Shares have surged 42% this year on a bevy of good news. In April, the Centers for Medicare and Medicaid Services announced a new reimbursement rule that could increase the payments the firm receives for its intravascular lithotripsy procedures. These procedures use sonic waves to "crack" hardened calcium in the coronary arteries.
Then, in May, SWAV stock surged again on a big earnings beat as rumors of a Boston Scientific buyout emerged and quickly fizzled.
Now, shares are eyeing a buy point at 308.09 out of a cup-with-handle base, IBD MarketSmith charts show. SWAV stock also is finding support at the 21-day line on a daily chart and at the 10-week moving average on a weekly chart.
A move above 300 would offer an early entry. The 300 level also exactly matches a prior buy point.
On the stock market today, SWAV stock rose 1.1% to 291.94.
SWAV Stock: 164% Earnings Growth
Shockwave's technology looks to replace an older method of removing calcium from the arteries called atherectomy. Atherectomy uses a small drill to dig through the calcifications.
In the first quarter, Shockwave's earnings more than doubled, soaring 164% to $1.03 per share. Sales jumped 72% to $161.1 million. Both soundly beat expectations. That followed the launch of its next-generation C2 Plus device outside the U.S. The company finished its international launch last month and is planning the U.S. debut in the fourth quarter.
C2 Plus uses more electrical pulses to accomplish the mission of breaking apart calcifications.
"The extra pulses are most advantageous in areas with the highest burden of calcium, including nodular, eccentric, diffuse and multi-vessel calcium," Dr. Jonathan Hill, a consultant cardiologist at the Royal Brompton Hospital in London, said in a recent news release from Shockwave.
But SWAV stock fell 6% on May 15, the day it announced the international launch of C2 Plus. That was far steeper than a fractional decline for the Medical-Systems/Equipment industry group.
Shockwave also announced it enrolled the first patient in an all-female study called Empower CAD. Women tend to show the symptoms of hardened calcium later in life than men. So, studies of calcium removal tend to have fewer women. Those that do enroll are often frailer than the men.
"This is a major step toward better understanding the optimal strategy for calcium modification in female patients, an underrepresented patient population who frequently are more challenging to treat and often experience suboptimal outcomes," Dr. Margaret McEntegart said in a written statement. McEntegart is the co-principal investigator for the study.
Highly Rated Medical Stock
In addition to forming a cup-with-handle base above its 50-day moving average, SWAV stock has two notably high IBD ratings.
Shares have a Relative Strength Rating of 94 out of a best-possible 99. This puts shares in the top 6% of all stocks when it comes to 12-month performance. SWAV stock also has an IBD Digital Composite Rating of 96. The CR is a 1-99 measure of fundamental and technical measures.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
