AngioDynamics Shrank On Purpose - Then Grew 9.5% | ANGO 10-K Deep Dive

Initiating coverage · FY2026 10-K (fiscal year ended May 31, 2026; filed July 14, 2026) · Filing data pulled from the RoboSystems SEC repository; market data as of July 14-16, 2026.

The Hook

Most companies shrink because something went wrong. AngioDynamics shrank on purpose - and fiscal 2026 is the year the strategy finally showed up in the numbers. After deliberately selling off its dialysis, BioSentry, PICC and Midline businesses in 2023 and 2024, revenue fell from $338.8 million in fiscal 2023 to $292.5 million in fiscal 2025. Then came the payoff: fiscal 2026 net sales of $320.2 million, up 9.5% as reported (9.4% pro forma), a seventh consecutive quarter of double-digit Med Tech growth, adjusted EBITDA up 73% to $13.2 million, and operating cash flow back in positive territory after the prior year's outflow. The market noticed - shares jumped roughly 13% on the July 14 print, from $12.78 to about $14.48.

The single most striking number in the filing sits inside the fourth quarter: NanoKnife sales up 64.5% year over year, including 132.5% growth in capital equipment. That's not a product suddenly getting better - it's a product suddenly getting paid for. Category I CPT codes for irreversible electroporation in prostate and liver went live January 1, 2026, and a Medicare local coverage determination took effect July 5, 2026. Reimbursement, not technology, is the inflection.

Company Snapshot

AngioDynamics (Nasdaq: ANGO, ~$600 million market cap) is a Latham, New York medical-device company focused on vascular disease and cancer. It runs two segments. Med Tech is the growth engine: Auryon (laser atherectomy for peripheral artery disease), the AlphaVac/AngioVac mechanical thrombectomy platform, and NanoKnife (irreversible electroporation for tumor ablation). Med Device is the legacy portfolio - ports, catheters, venous products - that grows slowly but generates the cash that funds Med Tech. This analysis covers the FY2026 10-K, the company's first full-year report to show the post-divestiture portfolio growing on a clean basis. One accounting note: the company leads with "pro forma" figures that exclude the divested and discontinued lines; on a reported GAAP basis, FY2026 revenue of $320.2 million grew 9.5% against FY2025's $292.5 million, and the pro forma growth rate is a nearly identical 9.4% - the distinction matters mostly for the prior years, where the revenue decline reflects divestitures, not decay.

The Financial Story

The shape of revenue tells the whole strategy. Fiscal 2022 through 2026: $316.2M → $338.8M → $303.9M → $292.5M → $320.2M. The two down years are the divestitures leaving the base; fiscal 2026 is the re-acceleration on a portfolio the company actually wants to own. Med Tech did nearly all the work: $150.0 million in sales, up 18.4%, now 47% of total revenue - up from roughly 22% when the transformation began in fiscal 2020 (management cites a ~24% compound growth rate for the segment over six years). Med Device added $170.2 million, up 2.5%, playing exactly the role management assigns it: steady, profitable, cash-generative ballast.

Every Med Tech platform is working. Auryon grew 17.7% to $66.9 million and has now delivered 20 consecutive quarters of double-digit growth. Mechanical thrombectomy grew 13.4% to $45.0 million, led by AlphaVac up 44.1% (AngioVac, up 2.1% for the year, declined 15.8% in Q4 against a tough comp). NanoKnife grew 35.2% to $33.1 million - and accelerated violently into year-end, up 64.5% in Q4 with probes up 47% and capital sales up 132.5%. The Q4 spike is the reimbursement story arriving: the AMA's Category I CPT codes activated in January, the PRESERVE pivotal trial's two-year data (97% of patients with PSA below baseline, no new treatment failures between months 12 and 24) was presented at AUA in May, and Palmetto GBA finalized Medicare coverage for prostate and liver IRE effective July 5, 2026. Subsequent to year-end, the FDA approved an IDE for the RELIEF study taking NanoKnife into benign prostatic hyperplasia - a market management says "dwarfs" prostate cancer.

The margin math is the thesis. Med Tech gross margin: 63.6% (up 160 basis points). Med Device gross margin: 46.7% (down 100 basis points). Every dollar of mix that shifts toward Med Tech carries roughly 17 extra points of gross margin, which is how total gross margin expanded 70 basis points to 54.6% despite a 151-basis-point tariff headwind ($4.8 million of tariff expense, versus $1.6 million in FY2025). Layered on top: the manufacturing-footprint restructuring (outsourcing production, completing in Q1 FY2027) is guided to deliver $15 million in annual cost savings starting fiscal 2027.

Now the reality check: this is still a GAAP-unprofitable company. The FY2026 net loss was $36.7 million ($0.88 per share), wider than FY2025's $34.0 million loss. Operating loss was $39.9 million. The GAAP loss turns into positive adjusted EBITDA through a series of add-backs: $23.0 million of depreciation and amortization, $14.0 million of stock-based compensation, and $17.6 million of "acquisition, restructuring and other items" - including $13.1 million of plant-closure costs and $1.6 million of CEO-transition expenses. (The $13.2 million figure is the pro-forma adjusted EBITDA.) The 10-K also carries a full valuation allowance against U.S. deferred tax assets, the company's own acknowledgment that it "has not yet attained a sustained level of profitability." The bull case is that the restructuring charges sunset as the plan completes; the honest read is that "profitability" here is an adjusted concept for now.

The balance sheet buys time and credibility. $53.9 million in cash, zero debt, an untouched $25 million revolver (JPMorgan, May 2025), and $13.3 million remaining on the buyback authorization. Operating cash flow swung from negative $10.1 million to positive $3.1 million - including a $17.5 million Q4 - even while absorbing tariffs. Committed obligations are modest: $25.6 million of future minimum royalties and six annual $2.5 million payments to BD under the 2024 patent settlement (a December 2025 Federal Circuit ruling in AngioDynamics' favor capped further contingent exposure). For a small cap running GAAP losses, this is an unusually clean liquidity position - the turnaround is self-funding at current burn.

Valuation - What It's Worth as a Normal Business

Where it trades. At roughly $14.48 (July 14 post-earnings), market cap is about $604 million on 41.7 million shares; net of $53.9 million in cash with no debt, enterprise value is roughly $550 million - about 1.7x FY2026 sales (1.9x price-to-sales). There is no meaningful P/E or EV/EBITDA on trailing numbers (EV/adjusted-EBITDA is ~42x on $13.2 million, which mostly tells you EBITDA is barely positive). For context, steady mid-single-digit-growth peer Merit Medical trades near 3.0x EV/sales and high-growth Penumbra near 8.3x (stockanalysis.com, July 2026). Analyst reaction to the print was uniformly positive: Freedom Broker raised its target to $17 (Buy), HC Wainwright to $19, and Canaccord Genuity to $20; the pre-print consensus was a Strong Buy with an $18 average target across four analysts.

Scenario DCF (five-year, WACC 10%, exit-multiple method; all assumptions stated, all figures illustrative). Bear: growth stalls at ~2% (Med Tech decelerates hard, Med Device erodes), EBITDA margin stuck near 5%, 8x exit multiple → implied value around $4 per share. Base: the FY2027 guide is roughly the run-rate (5-6% revenue growth), EBITDA margin reaches 10% by FY2031 on mix shift plus the $15 million cost savings, 13x exit → roughly $10-10.50 per share. Bull: 8% compound revenue growth (Med Tech sustains mid-teens), EBITDA margin reaches 14%, 16x exit → about $18.50 per share. Free cash flow in the interim years is modeled at a conservative ~40% EBITDA conversion, with NOLs shielding cash taxes.

The re-rating case is where the real upside lives. Value the two segments separately: if Med Tech - $150 million of revenue growing 18% at a 63.6% gross margin - were valued like a growth med-tech asset at 4-6x sales, and Med Device at 1-1.5x, the sum is roughly $770 million to $1.16 billion of enterprise value, or about $20-29 per share with cash. That is what the Street's most bullish targets are implicitly reaching for, and it only materializes if Med Tech keeps compounding until it is the company (on the FY2027 guide, Med Tech crosses the 50%-of-revenue line).

What today's price implies. At ~$14.50, the market is paying above the base-case DCF and well below the re-rating scenario - in other words, the price already fronts several years of clean execution (guide delivered, margins expanding, restructuring charges sunsetting) but gives little credit yet for NanoKnife's BPH option or a full mix-shift re-rate. These are implied values under stated assumptions - not price targets, and not investment advice.

Risks

The specific ones, from the filing and the call. Leadership: CEO Jim Clemmer is retiring after a decade, with a successor expected only in the first half of fiscal 2027 - a live transition during the most execution-sensitive year of the plan (the company logged $1.6 million of CEO-transition costs in FY2026). Reimbursement: the Medicare LCD covering NanoKnife came from one MAC (Palmetto GBA); national adoption across the other MACs and private payers is still to be won, and the risk-factor section is explicit that restrictive coverage decisions can cap procedure volumes. Tariffs cost $4.8 million in FY2026 and guidance assumes a "broadly similar" hit in FY2027 - a structural ~150-basis-point margin tax the company doesn't control. Competition: mechanical thrombectomy pits ANGO against Boston Scientific, Penumbra, and Stryker/Inari - vastly larger players - and Q4 already showed AngioVac shrinking 15.8% against a tough comp. NanoKnife capital sales (up 132.5% in Q4) are lumpy by management's own admission, making quarterly growth rates noisy. And structurally: this remains a GAAP-loss company with a full valuation allowance, a ~$600 million small cap with thin trading volume, and Q1 is seasonally its heaviest cash-usage quarter.

The Bottom Line

Fiscal 2026 is the first year AngioDynamics' shrink-to-grow strategy produced a clean, verifiable result in the reported numbers: high-margin Med Tech at 47% of revenue and compounding, gross margin expanding through a tariff headwind, adjusted EBITDA nearly doubling, and cash flow turning positive with zero debt. What it is not - yet - is GAAP-profitable, and the stock's post-earnings level already pays for the base case. The watch list from here: whether Med Tech crosses 50% of revenue on the FY2027 guide (12-15% segment growth), whether NanoKnife's Medicare coverage spreads beyond a single MAC, whether the GAAP loss actually narrows once restructuring completes and $15 million of savings land, and who takes the CEO chair. This is a framework for watching the story, not a recommendation.

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Every filing figure above was pulled from AngioDynamics' SEC filings via the RoboSystems shared data repository - run your own queries on any public company at robosystems.ai. New customers get 50% off your first month with code ROBO50.