Inari guidance seems very conservative

After reviewing the NARI earnings call I used the opportunity today to build a position. The share lost ~15% since the earning call - I assume one reason for that was the conservative revenue growth guidance by William Hoffman.

Looking at the results there is a lot to like:
From the call:

I’d like to turn our attention now to our Q1 financial performance, Our revenue in Q1 was $57.4 million, up $30.4 million or 113% from the same quarter last year and up $8.8 million or 18% from Q4.

So last Quarter they grew revenue 18% to 57.4mn.

However their revenue guide for FY ‘21 is:

While we continue to experience COVID-related challenges and uncertainties, we are comfortable providing forward-looking guidance as follows. For the full year 2021, we are guiding to $240 million to $250 million in revenue.

Their FY’20 revenue was 140mn - so they are guiding for ~80% YoY revenue growth - which would be a significant slow-down. They give this guidance whilst in the call they describe several Growth drivers - the key ones for this year in my opinion are:

We have historically stated our intent to add an average of 10 territories per quarter. However, based on our consistent success to date and our scalable approach to commercial expansion, we now believe we can be more aggressive with our hiring plan. We are currently targeting 180 to 200 total territories by the end of 2021.

So they have currently 150 territories and plan to expand by 20+% by year end.

Also they now have full market release for the New T20 Curve and FlowStasis which are seeing adoption:

During our last earnings call, we announced the limited market release of our T20 Curve, which has been FDA cleared for clot in transit, as well as our flows basis venous closure system. Both devices are now in full market release and enjoying brisk adoption.

Finally they expand to Europe - where they see Covid related expansion challenges but state they are making progress:

Our fifth and final growth driver is expansion into adjacent and international markets. We continue to make progress early in our European launch.

When asked about their guidance they basically say that they wanted to give a number that they can comfortably hit:

Just as a reminder, the IPO is about a year ago right now, and we’ve not yet had sort of a COVID free quarter as a company. So we’re still trying to understand exactly what that’s going to look like and I think as a result of that we are seeing obviously an improving business environment in the second half of the year, but we wanted to continue to be very confident and comfortable with the guidance, and we think the numbers we provided at the 240 to 250 sets us up in that territory or that range.

Based on the above I can’t see how they will not significantly exceed their guidance. Am I too bullish or is the recent share price drop not a great entry opportunity?


Based on the above I can’t see how they will not significantly exceed their guidance. Am I too bullish or is the recent share price drop not a great entry opportunity?

Great analysis. I agree with your bullish sentiment. My only concern with Inari is the overall TAM but it appears they have significant room to grow in the US for now and international expansion is likely to blossom by next year according to their guidance.

I’m thrilled with current growth even if it might be a little slower than recent triple digit numbers. Remember, they are having this spectacular growth despite temporary Covid headwinds.




On the call, CEO did make cautionary comments - in March and possibly April - due to hospitals getting flooded by all procedures that were on hold due to covid surge early in the year… so this was certainly dampening… Honestly, I was expecting the opposite to happen… i.e. I was expecting that their number of procedures to grow significantly and very upbeat statement for Q2…

And related to the same trend, management decided to pull back on quarterly guidance…

Both of these in my opinion raises risk a little higher…

While I was very impressed with the call and the CEO’s commentary on growth, and focus on patient outcomes, I would think these cautionary comments may have dampened some momentum. I would not be surprised if their Q2 results prove little less than satisfactory, even if they come up with raised guidance for rest of the year.

I did trim slightly… mostly to buy more UPST but I chose to move it from NARI for these reasons… still keeping NARI a sizable position… will watch this one closely.