Breaking Down AngioDynamics, Inc. (ANGO) Financial Health: Key Insights for Investors

Understanding AngioDynamics, Inc. (ANGO) Revenue Streams

Revenue Analysis

AngioDynamics, Inc. generates revenue primarily through two segments: product sales and service revenues. The main products include medical devices and surgical instruments used in various therapeutic procedures. The service segment includes maintenance, training, and consulting services related to their products.

In the fiscal year 2023, AngioDynamics reported total revenues of $215 million, which reflects a growth of 5% compared to fiscal year 2022 revenue of $204 million. Below is a breakdown of revenue from various segments for the last three fiscal years:

The contribution of the different business segments in fiscal year 2023 indicates that product sales accounted for approximately 95% of total revenue, while service revenues made up around 5%. Over the past three years, there has been a noticeable shift in the revenue composition:

• In fiscal year 2021, product revenue was 95% of total revenue.
• In fiscal year 2022, product revenue slightly decreased to 96%.
• In fiscal year 2023, product revenue remained stable at 95%.

Despite the overall growth, the service revenue showed a decline in fiscal year 2022 but rebounded in 2023. This fluctuation is significant as it shows the company’s reliance on product sales for steady growth while also highlighting opportunities to enhance service revenue.

In terms of geographical revenue streams, the largest market for AngioDynamics is the United States, contributing about 75% of total revenues in 2023. The European market follows with around 15%, while Asia-Pacific and other regions account for the remaining 10%.

Additionally, recent strategic changes, including new product launches and acquisitions, have affected revenue streams. The introduction of enhanced vascular access products in 2023 is projected to contribute to an anticipated revenue increase in subsequent periods.

A Deep Dive into AngioDynamics, Inc. (ANGO) Profitability

Profitability Metrics

AngioDynamics, Inc. (ANGO) showcases a variety of profitability metrics crucial for investors evaluating its financial health. The primary components of profitability include gross profit, operating profit, and net profit margins, which reveal the effectiveness of the company in managing its revenues and costs.

Gross Profit, Operating Profit, and Net Profit Margins

As of the fiscal year ending 2023, AngioDynamics reported:

• Gross Profit: $88 million, resulting in a gross margin of 54%.
• Operating Profit: $23 million, with an operating margin of 14%.
• Net Profit: $10 million, translating to a net margin of 6%.

Trends in Profitability Over Time

Analyzing AngioDynamics' profitability metrics over the past three years provides insight into its financial evolution:

• 2021: Gross profit was $82 million, with a gross margin of 52%.
• 2022: Gross profit increased to $85 million, with a margin of 53%.
• 2023: Gross profit reached $88 million, up from previous years.

Thus, the gross margin has shown a steady upward trend, improving from 52% in 2021 to 54% in 2023.

Comparison of Profitability Ratios with Industry Averages

Comparing AngioDynamics’ profitability ratios with the industry averages reveals its competitive standing:

• Gross Margin (ANGO): 54% vs. Industry Average: 50%.
• Operating Margin (ANGO): 14% vs. Industry Average: 10%.
• Net Margin (ANGO): 6% vs. Industry Average: 5%.

Analysis of Operational Efficiency

Examining operational efficiency is vital for understanding AngioDynamics' cost management:

• Cost of Goods Sold (COGS): $75 million, up from $72 million in 2022.
• Gross Margin Trend: Improved steadily from 52% in 2021 to 54% in 2023.
• Operating Expenses: $65 million, representing an increase of 10% year-over-year.

This analysis indicates that while AngioDynamics has managed to improve its gross margin, increasing operating expenses may affect future profitability.

Debt vs. Equity: How AngioDynamics, Inc. (ANGO) Finances Its Growth

Debt vs. Equity Structure

As of the latest financial reports, AngioDynamics, Inc. (ANGO) shows a comprehensive understanding of debt and equity financing, crucial for its operational growth and stability.

Currently, the total debt of AngioDynamics stands at approximately $50.9 million. This comprises both long-term and short-term debt, with the long-term debt amounting to around $48.7 million and short-term debt at approximately $2.2 million.

The debt-to-equity ratio is a pivotal metric for evaluating the company’s capital structure. As of the most recent quarter, AngioDynamics' debt-to-equity ratio is reported at 0.67. In comparison, the industry average for medical device companies hovers around 0.5. This indicates that AngioDynamics is slightly more leveraged than its peers, yet still maintains a balanced approach to financing.

In terms of recent debt activity, AngioDynamics successfully issued new senior secured notes, totaling $25 million. This issuance is part of a strategic move to refinance existing debt and improve liquidity. The company currently holds a credit rating of B+ from Standard & Poor's, reflecting its stable financial performance and risk profile.

To illustrate the company's financial strategy concerning its debt and equity funding, the following table summarizes key elements:

AngioDynamics effectively balances its debt and equity financing by strategically utilizing debt instruments to fund growth initiatives while maintaining a prudent equity structure. This blend aids in optimizing their capital costs and sustaining their competitive position in the medical device market.

Assessing AngioDynamics, Inc. (ANGO) Liquidity

Liquidity and Solvency

Assessing AngioDynamics, Inc.'s liquidity involves examining key financial ratios and working capital trends that reflect the company's ability to meet its short-term obligations. As of the latest fiscal year end, the current ratio for AngioDynamics was reported at 2.8, indicating that the company has $2.80 in current assets for every dollar of current liabilities. Meanwhile, the quick ratio stood at 1.9, suggesting a favorable liquidity position even when less liquid assets are excluded.

The analysis of working capital trends further illustrates the company’s financial health. For the fiscal year ending 2023, AngioDynamics reported working capital of approximately $37 million, reflecting a positive trend compared to $28 million the previous year. This increase can be linked to enhanced operational efficiency and strategic inventory management.

In reviewing the cash flow statements, the company displayed diverse trends across its operating, investing, and financing cash flows:

The operating cash flow has shown a positive trajectory, increasing from $18 million in 2022 to $25 million in 2023. This growth signifies improved profitability and effective management of operations. Conversely, investing cash flow indicates a net outflow, which increased from ($10 million) to ($15 million). This reflects ongoing investments in R&D and capital expenditures aimed at long-term growth.

Financing cash flow showed a shift from ($3 million) in 2022 to $5 million in 2023, indicating an improvement in managing debt or raising equity financing. This shift can contribute positively to the company’s overall liquidity position.

Despite these positive trends, potential liquidity concerns include the significant investments and their impact on cash reserves. Monitoring the ratios and trends closely will be crucial for maintaining a robust liquidity profile moving forward.

Is AngioDynamics, Inc. (ANGO) Overvalued or Undervalued?

Valuation Analysis

Analyzing the valuation of AngioDynamics, Inc. (ANGO) involves several critical financial ratios, stock trends, and performance metrics that help determine whether the company is overvalued or undervalued.

Price-to-Earnings (P/E) Ratio

As of October 2023, AngioDynamics has a P/E ratio of 25.4, which is higher than the industry average of around 18.2. This suggests that the stock may be overvalued compared to its peers.

Price-to-Book (P/B) Ratio

The P/B ratio for AngioDynamics stands at 3.1, contrasting with the industry average of 2.5. This indicates a premium valuation in terms of the company’s book value.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio

The current EV/EBITDA ratio for AngioDynamics is 15.6, compared to the sector average of 12.8. This reinforces the perception of a potentially overvalued stock.

Stock Price Trends

Over the past 12 months, AngioDynamics’ stock price has experienced the following trends:

• 12 months ago: $16.50
• 6 months ago: $20.00
• Current price: $21.00

The stock has seen an increase of approximately 27.3% in the last year, but this must be evaluated in the context of its financial metrics.

Dividend Yield and Payout Ratios

AngioDynamics currently does not pay a dividend, which is common among growth-oriented companies in the medical device sector. Thus, the dividend yield is 0% and the payout ratio is also 0%.

Analyst Consensus

According to the latest reports, the analyst consensus on AngioDynamics’ stock is currently rated as follows:

• Buy: 5 analysts
• Hold: 6 analysts
• Sell: 2 analysts

Comprehensive Valuation Table

Key Risks Facing AngioDynamics, Inc. (ANGO)

Key Risks Facing AngioDynamics, Inc.

AngioDynamics, Inc. (ANGO) faces a variety of internal and external risks that can significantly impact its financial health. Understanding these risks can help investors make informed decisions.

Industry Competition

The healthcare sector, particularly in medical devices, is marked by intense competition. AngioDynamics competes with large corporations and emerging startups. Companies like Medtronic and Boston Scientific leverage extensive resources, with Medtronic reporting year-end revenue of $30.12 billion in 2022.

Regulatory Changes

Healthcare regulations can be unpredictable. In 2022, the U.S. FDA made over 300 new regulatory changes affecting medical devices. Compliance with these regulations is crucial and can result in increased costs and delays in product launches.

Market Conditions

The global medical device market is projected to grow from $486 billion in 2021 to $637 billion by 2028, at a CAGR of approximately 4.3%. However, economic downturns, such as the recession risks reflected by a current inflation rate of 3.7% in the U.S., can impact discretionary healthcare spending.

Operational Risks

Operationally, AngioDynamics faces risks related to supply chain disruptions. Recent reports indicated that global supply chain issues have caused delays, with manufacturing and delivery timelines extending by an average of 20-30% in some cases. This can result in lost revenue opportunities and strained customer relationships.

Financial Risks

On a financial level, AngioDynamics' debt-to-equity ratio stands at approximately 0.45, indicating a balanced approach to leveraging. However, rising interest rates can increase financing costs. The Federal Reserve raised interest rates by 0.75% in 2022, directly impacting borrowing expenses.

Strategic Risks

Strategically, the company's reliance on a few key products, such as its VenaCure EVLT system, poses significant risk. A decline in sales from this product could greatly affect overall revenue, which was reported at $231 million for the fiscal year 2022. Diversification is essential to mitigate this risk.

Mitigation Strategies

• Investment in R&D to enhance product offerings and adapt to competitive pressures.
• Forming partnerships to expand market presence and share resources.
• Monitoring regulatory changes closely to ensure compliance and timely adaptation.

Future Growth Prospects for AngioDynamics, Inc. (ANGO)

Growth Opportunities

AngioDynamics, Inc. (ANGO) presents multiple avenues for future growth, driven by a combination of product innovations, market expansions, and potential acquisitions. Understanding these factors is crucial for investors looking to evaluate the company's long-term potential.

Key Growth Drivers

Product Innovations: AngioDynamics has been focusing on developing cutting-edge medical devices. For instance, their Auryon laser atherectomy system has shown promising adoption rates with a growth of approximately 20% in sales since its launch. The company has also expanded its product pipeline, aiming to introduce new offerings in the vascular access and oncology segments.

Market Expansions: AngioDynamics is targeting both domestic and international markets. In recent years, they have seen a 15% increase in their international sales, indicating a strong presence in Europe and Asia-Pacific regions. This growth is projected to continue as they invest in expanding their distribution networks and forging new partnerships.

Acquisitions: Strategic acquisitions are central to AngioDynamics' growth strategy. They historically allocate up to 10% of their annual revenue to acquire complementary businesses. Recent acquisitions of companies specializing in catheter solutions have bolstered their product offerings and market reach.

Future Revenue Growth Projections and Earnings Estimates

Analysts forecast that AngioDynamics will achieve a compound annual growth rate (CAGR) of 7% over the next five years. Revenue estimates for the year 2024 are projected to reach approximately $300 million, up from $250 million in 2023. Earnings per share (EPS) are expected to grow from $0.30 to approximately $0.40 over the same period.

Strategic Initiatives and Partnerships

AngioDynamics has engaged in several strategic partnerships that may foster growth. Collaborations with other medical device companies and research institutions have led to innovative product development, particularly in minimally invasive therapies. They have also established partnerships focused on telehealth solutions, expanding the company's reach in digital health.

Competitive Advantages

AngioDynamics' established brand recognition and reputation for quality position it favorably against competitors. The company boasts a strong intellectual property portfolio with over 100 patents. This provides a competitive edge in product development and helps prevent market entry by new players. Furthermore, a dedicated sales force, which has grown by 25% in recent years, enhances market presence and customer relationships.

The company’s focus on continuous innovation and responsive customer service reinforces its market position, enabling it to adapt rapidly to changing healthcare needs