Building on a track record of explosive sales growth, 2019 IPO Shockwave Medical continues to ride an awe-inspiring trend in earnings. This has landed SWAV stock a spot on the IBD Leaderboard watchlist as it takes aim at a fresh breakout.
Based in Silicon Valley, Shockwave Medical is a pioneer in the development of Intravascular Lithotripsy (IVL) to treat severely-calcified cardiovascular disease.
Last month, Shockwave initiated the first all-female coronary IVL study. The research will look at positive results from earlier studies and determine if they can be replicated, in an expanded population, with the Shockwave C2 Coronary IVL Catheter.
Patients with severely-calcified coronary lesions will be closely monitored for outcomes. The company's devices work by sending sonic "shock waves" to the target area to break up calcium, kidney stones and other things. The study will enroll up to 400 female patients with symptomatic ischemic heart disease, in up to 50 investigational centers in the United States and Europe.
The prior study showed similar safety outcomes for both sexes so this research data is especially important for the medical device's long-term viability.
Shockwave Medical To Continue Explosive Growth
Shockwave posted 116% sales growth last quarter, lifting above the $100 million revenue mark for the first time. Over the last three years, the company has delivered average annual revenue gains of 138%.
Stock Checkup shows a very low long-term debt-to-equity ratio of just 5% in 2021.
Current numbers are relative to prior-year quarters that showed a loss. But the med-tech upstart has booked accelerated earnings growth over the last four quarters, posting Q2 earnings of 68 cents per share vs. a penny loss in the same quarter last year.
In addition, Wall Street is forecasting a massive 1,240% EPS increase when the company reports Q3 numbers on Nov. 7.
Analysts also expect Shockwave Medical to post its first profit for a full year, at $2.55 per share.
SWAV Stock Tests Resistance Near Buy Point
Shockwave Medical gapped up to a new high after reporting Q2 earnings on Aug. 8. It hit more new highs until slipping at the end of that month.
As the market indexes sold off in September and earlier this month, SWAV stock retreated below its 50-day moving average. As October draws to a close, the stock is testing resistance at that benchmark line.
The relative strength line has fallen off its end-of-August highs. But Shockwave has managed to hold the bulk of gains from the big gap-up after Q2 earnings.
With Q3 earnings on deck, SWAV stock continues to work on a consolidation showing a 315 buy point. The stock undercut the low in its prior base, resetting the base count, so the current chart pattern is first-stage, a bullish indicator because early stage bases are more likely to succeed.
Market volatility and risk remain high but this newer IPO is boasting exceptional growth at the start of a new uptrend.
It is certainly one to watch to see if a strong earnings report can spark a fresh breakout in heavy volume.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
