Respiratory Infections Led OrthoPediatrics Miss Quarterly Sales Expectations, Analyst Calls It Transitory Issue

Monday, OrthoPediatrics Corp KIDS preannounced 4Q22 revenue of $31.0 million (up 25%), which was below the consensus of $33.2 million.
The company noted that increased respiratory illnesses (i.e., COVID, flu, RSV) caused procedural disruptions in pediatric hospitals and impacted its 4Q22 results.
Needham writes that though Q422 results are disappointing, the respiratory illness surge is a transitory issue and expects growth to improve in 2023. Thus the analyst maintains the Buy rating.
Stifel writes that following the mid-December RSV peak, cases have since returned to more “typical” seasonal levels. Also during the quarter, child flu cases were “7x higher than they’ve ever been,” but now are in line with more-normal historical trends.
Stifel analyst also notes that initial 2023 guidance includes continued staffing constraints, and the international business has been less impacted by RSV procedure pressures, though it remains choppy in select markets.
For FY22, interim sales are $122.3 million, +25% Y/Y, below the consensus of $124.48 million.
The company also provided FY23 sales guidance of $146-$149 million, below the consensus of $152.82 million.
Price Action: KIDS shares are down 0.95% at $43.84 on the last check Tuesday.

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