Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Novadaq On A Good Growth Path, But Valuation Makes It Volatile

When a stock trades at more than twice the upper limit of what's considered "normal" for growth stocks in its sector, investors need to be prepared for some significant volatility. It doesn't appear that there's anything really wrong with Novadaq Technologies (NASDAQ:NVDQ) other than that this is an emerging med-tech growth story still working to build up its sales capabilities and with a momentum-driven institutional investor base.

That operating expense ran high should surprise nobody who has followed emerging med tech. Placements continue to look strong and while flat recurring SPY revenue was a little disappointing, I believe it is a bump in the road. Valuation is steep here and predicated on major sales and profit acceleration, but...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
WITH SEEKING ALPHA PRO, INVESTORS CAN ALSO:
  • Access Top Ideas, chosen by Seeking Alpha’s editors
  • Filter long and short ideas by market cap and sector
  • Get Coverage of over 5,000 stocks, many of which have little or no coverage elsewhere
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO." Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else." Patrick Rice, Mainstay Capital Management
100% Satisfaction Guaranteed
Money back guarantee. Seeking Alpha PRO members receive a no-questions-asked refund for membership on months paid and not used. Details