Artivion, Inc. (AORT, $22.57): “Hold the Door, Artivion is Here”
By: Luke
Hunneke, AIM Student at Marquette University
Disclosure:
The AIM International Equity Fund currently holds this position. This article
was written by myself, and it expresses my own opinions. I am not receiving
compensation for it, and I have no business relationship with any company whose
stock is mentioned in this article.
Summary
- Artivion, Inc. (NYSE:AORT) develops
solutions that. Address cardiac and vascular surgeons’ clinical challenges
in treating patients with aortic diseases.
- Artivion
rebranded from Cryolife in Q4 2021. The Artivion name is derived from the
words Aorta, Innovation, and Vision.
- YoY revenue
growth for the On-X product segments and stents and graft segment is up
33%.
- Management’s
near-term plan is to accelerate revenue growth through three initiatives;
drive On-X growth while commercializing other products, expanding into
Asia-Pacifc and Latin America by receiving regulatory approvals, and securing
regulatory approvals for PerClot and. PROACT Mitral products.
Key
points: Artivion, after a recent rebrand from the Cryolife brand, looks
to capitalize on several factors that will affect revenue growth. Firstly,
Artivion is focusing on maximizing several stent and graft products; AMDS, NEXUS,
E-nside, and their new product, NEO. AMDS, the world’s first arch remodeling
hybrid device for use in the treatment of acute Type A dissections. Revenues for
AMDS have increased 20% YoY.
Artivion’s NEXUS product has also
done extremely well, posting quarterly revenue increase YoY of 233%. Artivion
is confident that a decline in COVID-19 infections will continue to increase
the amount of non-COVID treatment in hospitals and will cause an uptick in
NEXUS procedures in 2022. Artivion is also increasing their initiative to
expand internationally in the Asia-Pacific and Latin America regions. The
company has executed this strategy well so far, with quarterly revenues increasing
in both regions by 29% and 34%, respectively. These regions are expected to be
important contributors to Artivion’s future growth.
What
has the stock done lately?
Artivion’s stock price has hovered
around $18.00-$19.00 for the better part of 2021. February’s earnings call
increased the stock price several dollars to $21.00 and the price has hovered at
that range since. Artivion’s rebranding and several initiatives regarding new
products and international expansion should excite investors. Artivion’s stock
is up 25.53% over the past 3 months.
Past
Year Performance: Artivion is down -.04% YoY, holding evenly with the
Russell 2000 index. However, Artivion has performed much better than other
similar healthcare companies, where the sector as a whole is down -13% YoY.
My
Takeaway
Artivion has done a lot to
continue to increase their top line, and the introduction of several new
products, including NEO, look to continue to do so. Artivion’s international
initiative, if there are no regulatory problems, will also seek to provide
revenue growth for Artivion. It is my opinion that Artivion be kept in the AIM
Small Cap portfolio and classified as a Hold.
