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ShockWave Medical: Transformative Potential, But Much Upside Is Already Baked In

Mar. 06, 2021 12:32 AM ETShockwave Medical, Inc. (SWAV)12 Comments
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Healthcare on the Move


  • ShockWave has the potential to transform the treatment of peripheral arterial and coronary artery diseases.
  • Robust clinical data for intravascular lithotripsy therapy from CAD III and PAD III data will help push up IVL adoption rates.
  • The company is reducing its losses and carries a strong balance sheet.
  • The question is - at a price-to-sales multiple of 62, how much more can the stock grow in the next one year?

Investment Thesis

Lately, ShockWave Medical (NASDAQ:SWAV) seems to be falling out of favor with the investors. Although the stock has gained 206% in the last year and 18.5% YTD (year-to-date), the stock is down 13.5% from its high of $142.05 as of January 19, 2021. ShockWave's fourth-quarter revenues jumped 59% YoY (year-over-year) to $22.7 million and beat the consensus estimate by $2.6 million, but the company missed consensus earnings by $0.01.

But, this downtrend does not signify any fundamental weakness. In fact, there remains a strong and durable demand for ShockWave's IVL (Intravascular lithotripsy) therapy, as a safe, effective, and cheaper way to remove calcium that blocks the arteries in coronary artery and peripheral artery diseases. IVL is an already proven technology that involves sonic pressure waves and has been used successfully for 30 years to safely remove kidney stones. This technology is now repurposed to crack the calcium in the arteries, without damaging the surrounding soft tissue.

Shockwave is staring at an addressable market opportunity of over $6.0 billion. Canaccord analyst, William Plovanic, sees high penetration scope for the company for M5 IVL product in large bore access, S4 in BTK, and now C2 in coronary artery disease.

ShockWave has successfully proven the efficacy, safety, and cost-effectiveness of the IVL platform in several clinical trials.

The recently announced results from DISRUPT PAD III trial demonstrated the superiority of IVL therapy to angioplasty in successfully opening peripheral arteries with severely calcified lesions prior to stenting. IVL also scored better on several metrics of efficacy and safety such as a reduction in diameter stenosis, arterial dissections, and bailout stenting.

ShockWave has also announced positive results from Disrupt CAD III trial, which highlighted the efficacy and safety of IVL in opening the blood vessels in severely calcified coronary artery lesions, prior to

This article was written by

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I am an MBA in finance and an engineering graduate. I have also completed the CFA certification.I am involved in international trade and have been passionately tracking global equity markets for more than 7 years. I mainly focus on spotting long-term value investments in biotechnology, pharmaceutical, hospital, and medical device sectors. In the last two years, I have also been studying cannabis and hemp sectors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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