Yesterday’s Upgrade: Cardiovascular Systems Inc (CSII)

Cardiovascular Systems Inc (NASDAQ:CSII) received a stock rating upgrade from Needham on Apr-01-16. In a note to investors, the firm issued a Buy rating and also issued the target price on the stock of $16. The analysts previously had an Underperform rating on the stock.

Analysts have a consensus target price of $ 15.08 in the 12-month period. The price objective is 13.73% higher than the recent closing price of $ 13.26. The 52-week price range is $ 7.50 – 41.28 and the company has a market capitalization of $ 339.06M. Analysts covering the shares maintain a consensus Buy rating, according to Zacks Investment Research. 1 analyst has rated the stock with a sell rating, 1 has assigned a hold rating, 2 says it’s a buy, and 2 have assigned a strong buy rating to the company.

Cardiovascular Systems Inc (CSII) on March 31, 2016 reported preliminary revenue for its fiscal third quarter ended March 31, 2016. For the quarter, the company anticipates revenue to range from $43.5 million to $44 million, approximately 4 percent to 5 percent above the high end of its previously issued guidance range of $40.5 million to $42 million. Additionally, CSI announced broad-based restructuring measures to reduce costs as a key part of its plan to balance revenue growth with a pathway to profitability and positive cash flow. The restructuring measures include a workforce reduction of approximately 8 percent.

Scott Ward, CSI’s Chairman and Interim President and Chief Executive Officer, said, “As we discussed on our second-quarter earnings call, our immediate focus is to stabilize our sales force and resume sequential quarterly revenue growth. We’ve made solid progress on these goals, resulting in revenues exceeding guidance for the third quarter of this fiscal year. We also discussed our longer term effort of positioning CSI for profitability and positive cash flow. The restructuring announced today is a significant step in achieving these goals.”

As a result of the restructuring and previously announced departure of its CEO, CSI expects to take a one-time charge of approximately $4.5 million in its fiscal 2016 third quarter. Additionally, as disclosed on March 21, 2016, the company has reached an agreement in principle with the U.S. Department of Justice to settle claims underlying the government’s investigation. That agreement in principle is expected to result in a one-time charge of approximately $8 million in the fiscal 2016 third quarter.

All financial results are preliminary and subject to the company’s usual close procedures and review by its external auditors. Full third-quarter financial results are expected to be released on May 4.

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