Healthcare Business

Thoratec Implodes on Guidance and Revenue Miss

Thoratec Corp. (NASDAQ: THOR) was the king of the stock drops in Wednesday’s after-hours trading session. The reason for its drop of about one-quarter of its value was that its quarterly revenue of $118.1 million was roughly $10 million shy of estimates.

Also, the company’s annual revenue guidance of $455 million to $470 million was under the estimate of $523 million. A $30 million accelerated share buyback announcement did not even help.

We have seen multiple analyst downgrades as well. This stock has lost more than 25% of its value and was hitting 52-week lows after the lower guidance and revenue.

Thoratec was downgraded to Neutral from Buy at Goldman Sachs, with its price target cut to $28 from $38 in the call. Credit Suisse also downgraded Thoratec to Neutral from Outperform, slashing its price target to $27 from $40.

Oppenheimer cut its price target to $35 from $41 on reduced estimates. The firm said that the Thrombosis concerns drove its sales miss by saying:

Guidance assumes the issues persist though the second half, though initiatives are under way to improve both (most prominently a recent update to the FDA label with a balanced thrombosis discussion and highlighting improved HMII outcomes since original DT approval). While the stock will likely get hit on the reduced guidance, we have seen significant lumpiness in this market before and focus should shift to HMIII with the CE Mark trial under way.

Thoratec shares opened down at a new 52-week low, and unfortunately things went from awful to even worse. The stock opened at $24.11, versus a $32.57 close, and at 10:45 a.m. Eastern Time we saw the stock down 29.6% at $22.95. Trading volume was over 5.2 million shares, close to 10 times an average day’s trading volume.

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