NuVasive Poised For Strong Results

Nuvasive Inc. NUVA plans on holding an analyst meeting on September 14. According to Jefferies, while there may be doubt in the company's ability to continue its growth targets because of a poor spine market growth, revenue forecasts remain achievable given continued strong market share gains. Jefferies says the major issues roiling the market are pricing pressure, as hospitals have grown more effective at extracting concession from vendors of spinal implants, and lower procedure volumes, as the market has been hit by the three punch combination of economic uncertainty leading patients to delay procedures; insurance benefits slipping as unemployment continues and COBRA subsidies expire; and insurance companies requiring a higher pre-authorization threshold before approving surgeries. The worldwide spine market grew just 1-2% in 2Q, down from about 11% a year ago. The weak market backdrop would be a much larger concern if NuVasive's growth was not dependent almost entirely on share gains versus underlying growth. While with spine market is down, NuVasive's 2010 revenue targets still appear achievable. Jefferies has a Buy rating on NuVasive with a $51 price target. NuVasive closed Friday at $30.83