K2M Group Holdings, Inc. | $KTWO Stock | Shares Take A Tumble On Lower Than Expected Q4 Earnings


K2M Group Holdings, Inc. (NASDAQ: KTWO)



K2M Group Holdings, Inc. (KTWO), a medical device company yesterday reported their fourth quarter and full year 2016 financial results. K2M reported fourth quarter earnings of a loss of $0.30 per share which fell short of analyst expectations of a loss of $0.26 per share. K2M reported fourth quarter revenues of $61.8 million.  


K2M Group Holdings, Inc. CEO’s Comments

“We reported constant currency revenue growth of 14.9% year-over-year in the fourth quarter, driven by U.S. constant currency revenue growth of 21.5% year-over-year,” said President and Chief Executive Officer, Eric Major. “We delivered approximately 17% growth in the U.S. in calendar year 2016 and we believe this strong performance reflects the Company’s success in executing our strategic plan to introduce differentiated spine technologies and expand our global distribution network. Our U.S. growth reflects the clearest indication yet of the increasing adoption of our innovative products by the spine surgeon community. Outside the U.S., we successfully navigated challenging market disruptions with our distributors in Australia and Japan earlier in 2016, and look forward to building on our improving results during 2017 without the expectation of these headwinds.  We continue to anticipate our ability to grow our U.S. revenue in the mid-teens in 2017 with improved profitability.” Globe Newswire


KTWO Technical Analysis


KTWO opened trading yesterday at $21.50 which was down from the previous day’s trading close of $21.54. Shares closed trading yesterday at $21.30 and spiked down after market to $19.60, equivalent to a 8% decrease from the closing price. Taking a look at the daily chart we can see that the last time KTWO traded below these levels we have to go all the way back to December 1st 2016, when it traded at $19.03.

Taking a closer look at the daily chart we can see that before the spike down KTWO had been in an overall upward trend dating back to October 27th, 2016 when it traded at $16.39. KTWO has a float of 21.39 million shares and traded 1.71 times the normal daily trading volume on Monday.

For trading purposes, I would like to see KTWO open trading on Tuesday below $20.15 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.20 from my entry position fearing anything more than that and the stock would start to fill in the gap down.


Company Profile

K2M Group Holdings, Inc., a medical device company, focuses on designing, developing, and commercializing proprietary complex spine technologies and techniques in the United States and internationally. It provides implants, disposables, and instruments primarily to hospitals for use by spine surgeons to treat spinal pathologies, such as deformity, trauma, and tumor.

The company’s complex spine products comprise MESA and MESA 2 deformity spinal, EVEREST deformity spinal, MESA rail deformity spinal, Cricket deformity, Quicket deformity, CAPRI corpectomy cage, DENALI deformity spinal, MESA small stature spinal, MESA rail small stature spinal, MESA mini spinal, SERENGETI complex spine minimally invasive retractor, RAVINE complex spine lateral access, and SANTORINI corpectomy cage systems, as well as NILE alternative fixation technology.

Its minimally invasive spine products consist of SERENGETI minimally invasive retractor, RAVINE lateral access, CASCADIA lateral interbody, ALEUTIAN lateral interbody, TERRA NOVA minimally invasive access, EVEREST minimally invasive spinal and XT spinal systems. In addition, the company’s degenerative spine products consist of EVEREST degenerative spinal, CASCADIA AN and TL interbody, ALEUTIAN interbody, RHINE cervical disc, CHESAPEAKE interbody, PYRENEES cervical plate, and BLUE RIDGE hybrid cervical plate systems, as well as BaseCamp rod reduction technology. It markets its products under the ALEUTIAN, Basecamp, BLUE RIDGE, CAPRI, CASCADIA, CASPIAN, CAYMAN, CHESAPEAKE, Deformity Cricket, DENALI, EVEREST, Lamellar Titanium Technology, MESA, NILE, PYRENEES, Quicket, Rail 4D Technology, RAVINE, RHINE, SANTORINI, SERENGETI, TERRA NOVA, and tifix names.

The company promotes, markets, and sells its products through direct sales employees independent agencies, and distributor partners. K2M Group Holdings, Inc. was founded in 2004 and is headquartered in Leesburg, Virginia.  Yahoo Finance