It's been a great morning session for ShockWave Medical investors, who saw their shares rise 2.8% to a price of $219.01 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
ShockWave Medical Has Elevated P/B and P/E Ratios:
ShockWave Medical, Inc., a medical device company, develops intravascular lithotripsy (IVL) technology for the treatment of calcified plaque in patients with peripheral and coronary vascular, and heart valve diseases in the United States and internationally. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 24.45 and an average price to book (P/B) ratio of 4.16. In contrast, ShockWave Medical has a trailing 12 month P/E ratio of 36.2 and a P/B ratio of 13.04.
ShockWave Medical's PEG ratio is 17.55, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
An Exceptionally Strong Balance Sheet:
| 2020-03-12 | 2021-02-26 | 2022-02-25 | 2023-02-27 | |
|---|---|---|---|---|
| Revenue (k) | $42,927 | $67,789 | $237,146 | $489,733 |
| Operating Margins | -121% | -97% | 0% | 25% |
| Net Margins | -119.0% | -97.0% | -4.0% | 44.0% |
| Net Income (k) | -$51,109 | -$65,699 | -$9,136 | $215,996 |
| Net Interest Expense (k) | -$944 | -$1,212 | -$1,096 | -$1,886 |
| Depreciation & Amort. (k) | -$2,281 | -$1,863 | -$3,579 | -$4,856 |
| Earnings Per Share | -$2.14 | -$2.01 | -$0.24 | $5.7 |
| EPS Growth | n/a | 6.07% | 88.06% | 2475.0% |
| Diluted Shares (k) | 23,905 | 32,632 | 37,567 | 37,882 |
| Free Cash Flow (k) | -$44,290 | -$59,664 | $27,475 | $142,858 |
| Capital Expenditures | -$3,817 | -$11,520 | -$12,439 | -$25,126 |
| Net Current Assets (k) | $177,412 | $199,912 | $182,050 | $324,490 |
| Long Term Debt (k) | $7,152 | $13,319 | $11,630 | $24,198 |
| LT Debt to Equity | 0.04 | 0.06 | 0.05 | 0.05 |
ShockWave Medical has exceptional EPS growth, an excellent current ratio, and healthy debt levels. However, the firm has consistently negative margins with a stable trend. Finally, we note that ShockWave Medical has weak revenue growth and a flat capital expenditure trend and irregular cash flows.
