Why Does ShockWave Medical (SWAV) Have a Good Analyst Rating?

ShockWave Medical may be overvalued with poor growth indicators, but the 7 analysts following the company on average give it a buy rating. The analysts have set target prices ranging from $165 to $338 per share, for an average of $261.86. At today's price of $184.13, ShockWave Medical is trading -29.68% away from its average target price, suggesting there is an analyst consensus of strong upside potential.

ShockWave Medical, Inc., a medical device company, engages in developing and commercializing intravascular lithotripsy technology for the treatment of calcified plaque in patients with peripheral vascular, coronary vascular, and heart valve diseases worldwide. Based in Santa Clara, CA, the mid-cap Healthcare company has 657 full time employees. ShockWave Medical has not offered a dividend during the last year.

ShockWave Medical does not have a meaningful trailing P/E ratio since its earnings per share are negative. Its forward EPS guidance is negative too, at -0.27. The average P/E ratio for the Healthcare sector is 13.21. ShockWave Medical is likely overvalued compared to the book value of its equity, since its P/B ratio of 28.3 is higher than the sector average of 4.07.

So why are analysts giving SWAV a good rating? We believe analysts could be encouraged by the company's impressive explosive revenue growth and an EPS trend that is inching towards profitability. The company has low debt levels and positive cash flows.

2019-12-31 2020-12-31 2021-12-31
Revenue (k) $42,927 $67,789 $237,146
Revenue Growth n/a 57.92% 249.83%
Gross Margins 60.0% 69.0% 82.5%
Gross Margins Growth n/a 15.0% 19.57%
Operating Margins -120.8% -96.9% -0.4%
Operating Margins Growth n/a 19.78% 99.59%
Earnings Per Share -$2.14 -$1.99 -$0.26
EPS Growth n/a 7.01% 86.93%
Free Cash Flow (k) -$51,924 -$82,704 $2,597
FCF Growth n/a -59.28% 103.14%
Capital Expenditures (k) -$3,817 -$11,520 -$12,439
LT Debt to Equity 0.04 0.06 0.05
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.