Is ANGO a Buy as Med Tech Growth Battles Persistent Margin Pressure?

AngioDynamics, Inc. ANGO offers investors a clear trade-off. Its Med Tech platforms are expanding quickly, but near-term earnings conversion remains weak as tariffs and operating costs absorb part of the benefit.

The investment case depends on whether NanoKnife, Auryon and AlphaVac can build profitable scale fast enough to offset margin pressure and the execution risks attached to clinical development, reimbursement and commercialization.

ANGO’s Growth Case Is Getting Stronger

Fiscal 2026 revenues reached $320.2 million, up 9.5% on a reported basis. For fiscal 2027, AngioDynamics expects sales of $336 million-$341 million, implying another year of top-line growth.

The mix is more important than the total. Management projects Med Tech growth of 12%-15%, while Med Device revenues are expected to remain flat. Faster growth from the higher-margin Med Tech portfolio would continue shifting the business toward the products central to ANGO’s transformation.

NanoKnife Expands ANGO’s Oncology Opportunity

NanoKnife has gained support from prostate tissue-ablation clearance, Category I CPT codes and Medicare coverage guidance for qualifying prostate and liver cancer patients. These milestones can make billing more standardized and improve patient access.

The longer-term opportunity extends to pancreatic cancer, where a Category I CPT code for irreversible electroporation is scheduled to take effect in January 2027. Commercial progress still depends on broader payer coverage, physician adoption and sustained procedure growth.

Auryon and AlphaVac Broaden ANGO’s Upside

ANGO’s growth case does not rest on NanoKnife alone. Auryon revenues increased 17.7% in fiscal 2026 to $66.9 million, while AlphaVac revenues rose 44.1% to $15.5 million.

That diversification matters in competitive vascular markets. Boston Scientific Corporation BSX markets atherectomy and peripheral thrombectomy systems, while Penumbra, Inc. PEN offers a peripheral thrombectomy platform for clot removal in arteries, veins and pulmonary embolism. ANGO must keep expanding clinical evidence and commercial reach to protect its momentum.

Tariffs Limit ANGO’s Margin Upside

Fiscal 2026 gross margin improved 70 basis points to 54.6%, helped by pricing and a more favorable Med Tech mix. Tariff expenses, however, totaled $4.8 million and reduced gross margin by an estimated 151 basis points.

Fiscal 2027 gross-margin guidance of 54%-55% suggests limited near-term expansion. The cost base is also rising. In the fiscal fourth quarter, sales and marketing expenses increased 17.7%, and research and development expenses rose 24.1%, which could delay operating leverage even if revenues continue to climb.

ANGO’s Valuation Looks Mixed

ANGO trades at a forward 12-month price-to-sales ratio of 1.89, below the cited Zacks sub-industry ratio of 4.04 but above its five-year median of 1.46. That leaves the stock between two valuation signals.

The discount to the sub-industry provides some support, but the premium to ANGO’s own history means the shares are not an obvious bargain. Execution against fiscal 2027 sales, margin and adjusted EBITDA targets will be important for sustaining the current multiple.

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ANGO’s Underperform Signal Favors Patience

The operating direction is improving, but the buy case is not yet decisive. Med Tech growth, reimbursement progress and a debt-free balance sheet support the long-term story, while tariffs, higher expenses and clinical execution risks argue for patience.

ANGO currently carries a Zacks Rank #4 (Sell), which favors a wait-and-see approach rather than an aggressive purchase.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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