LivaNova PLC LIVN

Livanova Earnings: Preliminary Osprey Trial Data Provides Hope for New Sleep Apnea Product in 2026

Narrow-moat Livanova posted first-quarter results that exceeded our expectations on the topline but were consistent with our profitability projections. We continue to hold more tempered views for slower growth in the second half of 2024, which is consistent with management's comments and, as a result, our fair value estimate is unchanged. Though quarterly revenue grew strongly at 12% year over year, below-the-line charges pushed earnings down. Considering that new CEO Vladimir Makatsaria is eager to demonstrate positive results now that he's leading the charge, we wouldn't be surprised if above-market growth could extend through the second quarter, aided by the regulatory and supply issues with oxygenators from competitors. If competitive oxygenators are able to return to the market in the second half of 2024, as expected, we anticipate Livanova's cardiopulmonary business could see noticeable moderation.