Continue Reading Below
Image source: Getty Images.
After JP Morgan cut its rating on the stock ahead of third-quarter earnings being released after the bell,Intersect ENT(NASDAQ: XENT)shares are losing 43% of their value at 12:30 p.m. EDT Wednesday.
JP Morgan has cutIntersect ENT from overweight to neutral Wednesday morning, and reduced its price target to $16 from $25.
Continue Reading Below
Intersect-ENTmarkets the steroid-releasing implants Propel and Propel mini, which are used to improve outcomes for chronic sinusitis patients undergoing sinus surgery, and industry watchers are estimating that Wednesday afternoon's earnings report will include sales of $17.8 million and a loss per share of $0.27.
Earlier this year, investors were concerned that turnover in sales personnel was limiting top-line growth, and exiting Q2 management said it expects results will be on the low end of its prior $78 million to $80 million guidance. Clearly, JP Morgan isn't holding out hope that the company will deliver an upside surprise when it reports third-quarter results.
While Intersect ENT is stumbling on JP Morgan's downgrade, it may be worth tuning into its conference call later Wednesday to see if there may be an opportunity to buy shares on sale. Despite concerns, sales did grow 27% year over year last quarter, gross margin improved, and the company appears to have enough cash to keep the lights on for a while.
Assuming its pipeline opportunities pan out, sales march forward, and the company offers a clear line of sight to profit, then this could be an intriguing company to bargain hunt.
A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Todd Campbellhas no position in any stocks mentioned.Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned.Like this article? Follow him onTwitter where he goes by the handle@ebcapitalto see more articles like this.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.