The Company develops, manufactures and markets products for use by physician specialists, including interventional neuroradiologists, neurosurgeons, interventional neurologists, interventional radiologists and vascular surgeons. They design their products to provide these physicians with the means to drive improved clinical outcomes.
Since the Company's founding in 2004, Penumbra has had a strong track record of organic product development and commercial expansion that has established the foundation for a global organization. Their accomplishments include:
- launching their first product, for neurovascular access, in the United States in 2007
- establishing a direct neuro salesforce in the United States and Europe in 2008
- launching the first U.S. Food and Drug Administration (FDA)-cleared, aspiration catheter for the treatment of ischemic stroke patients in 2008, and launching five subsequent generations of that product
- launching their first neurovascular coil for the treatment of brain aneurysms in 2011
- launching their first peripheral vascular product in 2013
- establishing their direct peripheral vascular salesforce in the United States and Europe in 2014
- launching their first peripheral thrombectomy products for the treatment of venous disease in 2015.
The Company attributes theyr success to their culture of cooperation, highly efficient product innovation process, disciplined approach to product development, a deep understanding of target end markets and a relationships with physicians.
Penumbra sells their products to hospitals primarily through a direct sales organization in the United States, most of Europe, Canada and Australia, as well as through distributors in select international markets. The Company generated revenue of $263.3 million, $186.1 million and $125.5 million for the years ended December 31, 2016, 2015 and 2014. This represents annual increases of 41.5% and 48.3%. The Company generated an operating loss of $1.4 million for the year ended December 31, 2016 and operating income of $4.2 million and $3.0 million for the years ended December 31, 2015 and 2014.
Penumbra, Inc. designs, develops, manufactures, and markets medical devices in the United States, Europe, Canada, Australia, Japan, and internationally. The company offers neurovascular access systems designed to provide intracranial access for use in a range of neurovascular therapies under the Neuron, Neuron MAX, Select, BENCHMARK, DDC, PX SLIM, and Velocity brands; aspiration based thrombectomy systems and accessory devices under the Penumbra System brand; and revascularization device for mechanical thrombectomy under the 3D brand. It also provides neurovascular embolization coiling systems to treat patients with various sizes of aneurysms and other neurovascular lesions under the Penumbra Coil 400 and Penumbra SMART Coil brands; and neurovascular stents for stent-assisted coiling in large and wide-neck aneurysms under the LIBERTY Stent brand. In addition, the company offers neurosurgical aspiration tools for the removal of tissue and fluids under the Apollo System brand; and detachable embolic coil systems for peripheral embolization under the RUBY Coil brand, as well as microcatheter for the delivery of detachable coils and occlusion devices under the Lantern brand. Further, it provides detachable, microcatheter-deliverable occlusion devices designed primarily to occlude peripheral vessels under the POD (penumbra occlusion device) brand; and aspiration-based thrombectomy systems for peripheral applications under the Indigo System brand, as well as POD Packing Coil, a device for use with RUBY Coil and POD for vessel occlusion. The company sells its products through direct sales organizations and distributors to hospitals in neuro and peripheral vascular markets. Penumbra, Inc. was founded in 2004 and is headquartered in Alameda, California.
(Summary) (Company) (Chart)
28 November 2017
1yr Target $116.40
Payout Ratio 0.00%
1yr Cap Gain 10.22%
1yr Tot Return 10.22%
EPS (ttm) $0.21
EPS next yr $0.05
Forward P/E 1955.56
EPS next 5yr 67.00%
1yr Price Support $3.35
Market Cap $3.59 Bil
Revenues $310.80 Mil
Earnings $10.50 Mil
Profit Margin 3.37%
Quick Ratio 5.50
Current Ratio 7.30
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Penumbra concentrates on improving treatment outcomes for patients with certain forms of vascular disease. Vascular disease refers to any condition that affects the circulatory system and typically manifests as a blockage or rupture of an artery or a vein. When the treatment for vascular disease is performed from within a vessel, it is referred to as an endovascular procedure. Endovascular device markets are conventionally classified according to the anatomic location of the disorder, and are generally divided into neurovascular, peripheral vascular and cardiovascular. The Company currently operates in the neuro and peripheral vascular markets. In both of these markets, the main product technologies include thrombectomy devices to remove clots and embolization devices to treat aneurysms and to occlude vessels.
Sales and Marketing
Penumbra sells products directly in the United States, most of Europe, Canada and Australia. They have complemented their direct sales organization with distributors in Japan and most other international markets. The Company has regulatory clearance/approval to sell certain neurovascular access, ischemic stroke, neurovascular embolization, peripheral embolization and peripheral thrombectomy products in two of three major markets, the United States and Europe, with the exception of Penumbra’s 3D device which has been approved in Europe but not cleared in the United States. In the third major market, Japan, the Company has regulatory approval to sell ischemic stroke, neurovascular embolization and peripheral embolization products. Specifically, Penumbra Coil 400 products are used for peripheral embolization in Japan, and have received regulatory approval for that use in that market.
The Company currently sells products to hospitals in the United States through a dedicated salesforce in their two major markets, neuro and peripheral vascular. Sales representatives and sales managers generally have substantial medical device experience and market their products directly to a variety of physicians engaged in the treatment of neurovascular and peripheral vascular disorders, who are the end users of the products. They also significantly influence hospital buying decisions relating to medical devices. Penumbra is focused on developing strong relationships with physicians and devote significant resources to training and educating physicians in the use and benefits of their products. The principal physicians in the two target end markets include:
- Neuro: Interventional neuroradiologists, neurosurgeons and interventional neurologists.
- Peripheral vascular: Interventional radiologists and vascular surgeons.
My Path Forward
This is an interesting company that obviously fills a desperate need within the medical community. But they also have competition, which is what would be expected. It's also extremely overvalued at this level but it's because investors are looking at that extremely high growth rate going forward. It's also something that caught my eye. I also became intrigued when I noticed virtually no debt and plenty of liability coverage to keep this company growing for and extended period.
My expectation is to put a buy in for these shares somewhere near the 20 and 40 week moving average. Looking at the price chart it appears that the stock often bounced off these moving averages and since there's no hurry to buy, I believe this would be a great place to start. Hopefully over time share price growth will correspond to the estimated earnings growth rate. At 67%, that would be a very nice growth rate.