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...

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