Outset Medical Stock Tumbles After Shipment Pause Of TabloCart - Here's Why

In its Q2 earnings release, Outset Medical Inc OM announced it has paused the shipment of TabloCart with Prefiltration, an accessory for the Tablo System, pending the FDA's clearance of a 510(k) the company plans to submit later this month.

"Since receiving the Warning Letter on July 6, we have made the decision to file a 510(k) for TabloCart with Prefiltration and pause distribution of the product until a 510(k) clearance has been granted," said Leslie Trigg, Chair & CEO. "As we look ahead to the second half of the year, we expect our strong momentum both in the acute and home end markets to continue to drive the business."

Q2 revenue increased 43.8% to $36.0 million, beating the consensus of $35.18 million.

The adjusted gross margin improved to 22.5% from 15.9% in the second quarter of 2022.

The company reported an adjusted EPS loss of $(0.69), down from $(0.77) a year ago and beating the consensus of $(0.73).

Guidance: Outset reiterated its 2023 revenue guidance range of $144 million-$150 million, compared to the consensus of $147.35 million, and now expects to be at the low end due to the shipment pause for TabloCart with Prefiltration. 

The company reaffirmed its gross margin guidance for the year to be in the low 20% range, exiting the fourth quarter in the mid-20% range.

Price Action: OM shares are down 9.76% at $17.47 on the last check Thursday.