LivaNova stock plummets to record low despite profit surge—Here’s why
LivaNova (LIVN) stock crashed 15.76% on Tuesday, closing at an all-time low of $41.70—even as the company beat estimates with a 261% jump in net income.
The Italian-American medical technology firm reported $63.2 million in profit for 2024, an impressive growth that would typically send investors rushing in. But even strong earnings couldn’t distract from LivaNova’s legal woes.
The selloff is in response to the company’s ongoing lawsuit, alleging the firm is on the hook for environmental liabilities tied to its predecessor companies.
The Court of Milan ruled in 2019 that LivaNova was responsible for Sorin Medical Group's past liabilities, a decision reaffirmed in 2021 when the company was ordered to pay €453 million (roughly $519 million).
LivaNova appealed to Italy’s Supreme Court, and Wednesday’s public hearing is the first major update on the case since a 2022 SEC filing.
LivaNova’s stock has been on a rollercoaster ride. It hit $64.15 last May before sliding to $43.18 in August. Investors are left wondering whether the worst is behind them.
The origins of LivaNova’s legal troubles
Buried in LivaNova’s 2024 financial statement, the company disclosed a key legal development: “On February 26, 2025, the Italian Supreme Court will hold a public hearing in connection with the SNIA litigation.”
SNIA, a now-defunct firm absorbed into Sorin Medical Group in 1999, ultimately became part of LivaNova through a 2015 merger. The company added that while no decision is expected at the hearing, a ruling on the appeal could come in the first half of 2025.
Although the initial market reaction points to a rather pessimistic outlook, after-hours trading suggests the sell-off may be overblown, with LIVN bouncing nearly 8% to $45.
A strong quarter overshadowed
LivaNova’s financial results told a different story.
The company turned a corner in 2024, beating analyst estimates and posting $37 million in operating income in Q4—a sign of recovery from its $88 million loss in the same period a yer ago.
Its cardiopulmonary business grew 13%, and clinical trials for new products wrapped up. "We are pleased with these results and the clinical milestones achieved in both the obstructive sleep apnea and difficult-to-treat depression programs,” CEO Vladimir Makatsaria said.