LivaNova PLC (LIVN) Stock Analysis and Metrics

LivaNova

NASDAQ: LIVN

$78.19 ▼ -0.42 (-0.53%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap4.30 Bn

P/E39.80

P/S3.00

Div. Yield0.00

ROIC (Qtr)0.01

Total Debt (Qtr)287.91 Mn

Revenue Growth (1y) (Qtr)14.33

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About

LivaNova PLC is a leading global medical technology company that designs develops manufactures markets and sells products therapies and services aimed at improving patient outcomes. The company is headquartered in London England and its ordinary shares are listed on the Nasdaq under the ticker LIVN. LivaNova PLC pursues its mission to create ingenious medical solutions that ignite patient turnarounds.

The company generates revenue through the sale of cardiopulmonary and neuromodulation devices along with related services to healthcare providers worldwide. In the cardiopulmonary business revenue comes from products such as heart lung machines oxygenators autotransfusion systems perfusion tubing systems cannulae and associated accessories and from service contracts for equipment maintenance and technical support. In the neuromodulation business revenue is derived from the VNS Therapy System devices leads surgical accessories and from the aura6000 system for obstructive sleep apnea including ongoing service and support.

The company operates through the following segments: Cardiopulmonary and Neuromodulation. These segments are identified based on how management evaluates performance and allocates resources.

• Cardiopulmonary: This segment designs develops manufactures markets and sells cardiopulmonary products including heart lung machines oxygenators autotransfusion systems perfusion tubing systems cannulae and related accessories and provides services such as equipment maintenance technical support and training for healthcare professionals.

• Neuromodulation: This segment designs develops manufactures markets and sells devices that deliver neuromodulation therapy for treating drug resistant epilepsy and treatment resistant depression including the VNS Therapy System leads surgical accessories and programming tools and also develops the aura6000 system for obstructive sleep apnea which stimulates the hypoglossal nerve to keep the airway open during sleep.

LivaNova PLC holds a strong position in the global medical device market competing with major players such as Terumo Medical Corporation Maquet Medical Systems Medtronic plc Haemonetics Corporation Spectrum Medical Limited and NeuroPace Inc. The company differentiates itself through a focus on innovation clinical evidence and a broad portfolio that addresses critical needs in cardiac surgery and neurological therapy. Its competitive advantages include proprietary technology strong relationships with healthcare providers and a commitment to quality and regulatory compliance.

The company serves a diverse customer base that includes perfusionists neurologists neurosurgeons other healthcare professionals hospitals and other medical institutions and healthcare providers worldwide. In cardiopulmonary the main customers are hospital perfusion teams and surgical departments that perform coronary artery bypass valve surgery and other cardiac procedures. In neuromodulation the primary customers are neurologists neurosurgeons and epilepsy treatment centers that implant vagus nerve stimulation devices and sleep specialists who treat obstructive sleep apnea.

Investment Thesis

▲ Bull case

LivaNova's Cardiopulmonary segment is positioned for sustained double-digit organic revenue growth driven by the Essenz rollout and manufacturing capacity expansion, with Heart-lung machine revenue up approximately 30% in Q1 FY25 and the company raising its full-year 2025 Cardiopulmonary revenue growth forecast to 9% to 10% from 7% to 8%, incorporating new Essenz launches including recent regulatory approval in China—the company's second-largest HLM market after the U.S.—and continued consumables demand, as management highlighted investments in an additional manufacturing line expected to be operational by mid-next year to support long-term share gains in oxygenators and HLMs, with Essenz projected to reach 60% of HLM placements in 2025 and a path to 80%-100% penetration in subsequent years, underpinned by strong price premium maintenance and market share progression from low to mid-30s in oxygenators, where demand continues to outpace supply and the company expects another 10% capacity increase in 2025 following a 10% increase in 2024.
The resolution of the SNIA litigation overhang, with a $360 million liability recognized in Q1 FY25 and the subsequent reclassification of $295 million of restricted cash and repayment of $200 million in term facilities, has eliminated a historic financial uncertainty, enabling greater capital allocation flexibility as stated by the CEO, and while the adjusted diluted EPS impact for the balance of 2025 is approximately $0.20, the company views this as retiring a longstanding overhang, positioning LivaNova to redirect capital toward core growth initiatives in neuromodulation and Cardiopulmonary, supported by a healthy leverage ratio and additional borrowing capacity for disciplined inorganic options in attractive markets with high unmet needs.
LivaNova's neuromodulation innovation pipeline, particularly the OSPREY trial for obstructive sleep apnea demonstrating a 65% responder rate at 12 months and rapid therapeutic onset (one in four patients responding on day one), provides a durable long-term growth avenue beyond core epilepsy, with the PMA submission to the FDA completed and the company leveraging its differentiated proximal hypoglossal nerve stimulation (pHGNS) six-electrode architecture for personalized titration and algorithm-driven optimization, while progress in difficult-to-treat depression (DTD) is reinforced by four published RECOVER studies and a fifth critical manuscript expected in Q2 FY25, which utilizes a clinically relevant composite metric aligned with CMS priorities and demonstrates favorable response in patients who failed prior interventional therapies, including electroconvulsive therapy, supporting the company's pursuit of Medicare coverage through the Coverage with Evidence Development program and signaling a meaningful opportunity to expand its portfolio into a large patient population with high unmet need.

LivaNova's Cardiopulmonary segment is positioned for sustained double-digit organic revenue growth driven by the Essenz rollout and manufacturing capacity expansion, with Heart-lung machine revenue up approximately 30% in Q1 FY25 and the company raising its full-year 2025 Cardiopulmonary revenue growth forecast to 9% to 10% from 7% to 8%, incorporating new Essenz launches including recent regulatory approval in China—the company's second-largest HLM market after the U.S.—and continued consumables demand, as management highlighted investments in an additional manufacturing line expected to be operational by mid-next year to support long-term share gains in oxygenators and HLMs, with Essenz projected to reach 60% of HLM placements in 2025 and a path to 80%-100% penetration in subsequent years, underpinned by strong price premium maintenance and market share progression from low to mid-30s in oxygenators, where demand continues to outpace supply and the company expects another 10% capacity increase in 2025 following a 10% increase in 2024.
The resolution of the SNIA litigation overhang, with a $360 million liability recognized in Q1 FY25 and the subsequent reclassification of $295 million of restricted cash and repayment of $200 million in term facilities, has eliminated a historic financial uncertainty, enabling greater capital allocation flexibility as stated by the CEO, and while the adjusted diluted EPS impact for the balance of 2025 is approximately $0.20, the company views this as retiring a longstanding overhang, positioning LivaNova to redirect capital toward core growth initiatives in neuromodulation and Cardiopulmonary, supported by a healthy leverage ratio and additional borrowing capacity for disciplined inorganic options in attractive markets with high unmet needs.
LivaNova's neuromodulation innovation pipeline, particularly the OSPREY trial for obstructive sleep apnea demonstrating a 65% responder rate at 12 months and rapid therapeutic onset (one in four patients responding on day one), provides a durable long-term growth avenue beyond core epilepsy, with the PMA submission to the FDA completed and the company leveraging its differentiated proximal hypoglossal nerve stimulation (pHGNS) six-electrode architecture for personalized titration and algorithm-driven optimization, while progress in difficult-to-treat depression (DTD) is reinforced by four published RECOVER studies and a fifth critical manuscript expected in Q2 FY25, which utilizes a clinically relevant composite metric aligned with CMS priorities and demonstrates favorable response in patients who failed prior interventional therapies, including electroconvulsive therapy, supporting the company's pursuit of Medicare coverage through the Coverage with Evidence Development program and signaling a meaningful opportunity to expand its portfolio into a large patient population with high unmet need.

▼ Bear case

U.S. Epilepsy revenue growth remains fragile and potentially underestimated, rising only 2% in Q1 FY25 amid procedure deferrals from a field safety notification related to the SenTiva generator component issue, which management estimates caused under $2 million in unfavorable revenue impact, and while the FDA-approved design change is expected to enable updated generator distribution by midyear, the company's shift to periodic rather than quarterly disclosure of U.S. new patient and replacement implant volumes obscures near-term visibility into demand trends, raising concerns that the deferrals may reflect deeper adoption challenges rather than pure timing shifts, especially as management acknowledged the U.S. Epilepsy business experienced procedure deferrals and maintained a cautious full-year growth outlook of 4% to 5%, with low-single-digit U.S. growth assumed despite Europe and Rest of World strength.
Gross margin pressure persists due to unfavorable product mix and inflationary headwinds, with adjusted gross margin decreasing to 70% from 71% year-over-year, partially offset only by favorable pricing, and while R&D as a percentage of revenue decreased to 12% from 15% due to investment optimization in the DTD program and ACS segment wind-down, SG&A as a percentage of revenue remained flat at 38% despite dollar-based increases from commercial investments and systems infrastructure, indicating limited operating leverage expansion beyond top-line growth, and the adjusted effective tax rate increased to 24% from 21% due to changes in geographic mix and roll-off of historical tax attributes, creating a structural headwind to EPS growth that is not fully offset by operating income expansion.
Tariff exposure, while currently estimated at less than $5 million impact on adjusted operating income for the year and described as "captured within guidance," remains an uncertain and evolving risk, with management acknowledging the broader environment is uncertain and noting that reassessment will occur after the 90-day timeframe post-April 2 expires, and given that approximately two-thirds of Cardiopulmonary revenue is generated outside the U.S. while neuromodulation products are U.S.-manufactured with 80% of revenue from the U.S., any escalation in tariffs could disproportionately affect the international-facing CP segment, and the company's mitigation strategy—including marginal pricing actions and supply chain adjustments—may prove insufficient if tariff rates increase significantly, potentially undermining the negligible impact assumption embedded in current guidance.

U.S. Epilepsy revenue growth remains fragile and potentially underestimated, rising only 2% in Q1 FY25 amid procedure deferrals from a field safety notification related to the SenTiva generator component issue, which management estimates caused under $2 million in unfavorable revenue impact, and while the FDA-approved design change is expected to enable updated generator distribution by midyear, the company's shift to periodic rather than quarterly disclosure of U.S. new patient and replacement implant volumes obscures near-term visibility into demand trends, raising concerns that the deferrals may reflect deeper adoption challenges rather than pure timing shifts, especially as management acknowledged the U.S. Epilepsy business experienced procedure deferrals and maintained a cautious full-year growth outlook of 4% to 5%, with low-single-digit U.S. growth assumed despite Europe and Rest of World strength.
Gross margin pressure persists due to unfavorable product mix and inflationary headwinds, with adjusted gross margin decreasing to 70% from 71% year-over-year, partially offset only by favorable pricing, and while R&D as a percentage of revenue decreased to 12% from 15% due to investment optimization in the DTD program and ACS segment wind-down, SG&A as a percentage of revenue remained flat at 38% despite dollar-based increases from commercial investments and systems infrastructure, indicating limited operating leverage expansion beyond top-line growth, and the adjusted effective tax rate increased to 24% from 21% due to changes in geographic mix and roll-off of historical tax attributes, creating a structural headwind to EPS growth that is not fully offset by operating income expansion.
Tariff exposure, while currently estimated at less than $5 million impact on adjusted operating income for the year and described as "captured within guidance," remains an uncertain and evolving risk, with management acknowledging the broader environment is uncertain and noting that reassessment will occur after the 90-day timeframe post-April 2 expires, and given that approximately two-thirds of Cardiopulmonary revenue is generated outside the U.S. while neuromodulation products are U.S.-manufactured with 80% of revenue from the U.S., any escalation in tariffs could disproportionately affect the international-facing CP segment, and the company's mitigation strategy—including marginal pricing actions and supply chain adjustments—may prove insufficient if tariff rates increase significantly, potentially undermining the negligible impact assumption embedded in current guidance.

Segments Breakdown of Revenue (2025)

Peer Comparison

Companies in the Medical Devices

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	ABT	Abbott Laboratories	201.40 Bn	27.98	4.46	34.05 Bn
2	SYK	Stryker Corp	122.29 Bn	36.60	4.84	14.72 Bn
3	MDT	Medtronic plc	105.01 Bn	21.73	2.89	27.96 Bn
4	BSX	Boston Scientific Corp	64.81 Bn	18.16	3.14	11.03 Bn
5	EW	Edwards Lifesciences Corp	55.28 Bn	2,354.76	8.77	0.60 Bn
6	DXCM	Dexcom Inc	29.06 Bn	29.17	6.03	-
7	PHG	Koninklijke Philips Nv	29.02 Bn	22.06	1.42	9.48 Bn
8	GEHC	GE HealthCare Technologies Inc.	28.27 Bn	14.30	1.35	10.14 Bn

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Investment Thesis

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

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