Medical products company EV3 (EVVV) has again missed quarterly earnings estimates. Zacks senior medical devices analyst Greg Aurand, CFA explains in his latest report why he is keeping his Hold recommendation on the shares:

Like the first quarter, the company reported second quarter results below expectations, largely due to higher litigation expenses. Given the shortfalls, we are increasing our 2007 loss estimates.

However, the proposed FoxHollow deal complements EVVV's strengths and increases profitability, with the combined company expected to earn $0.60-$0.70 per share on anticipated $585-$615 million in revenue in 2008, and $0.90-$1.10 per share and $700-$750 million in revenues in 2009.

The company concentrates on catheter-based, or endovascular, technologies for the minimally invasive treatment of vascular diseases and disorders. The company's acquired broad product portfolio is focused, hence its corporate name, on applications in each of the three sub-markets of the endovascular device market: peripheral vascular, cardiovascular and neurovascular.

We are not changing our estimates at this time. At the current price, EVVV trades at 3.3x 2008 revenues. At roughly in-line with the comparables average of 3.3x 2008 revenues, our target remains at $18.00. We note that the combined company, with $600 million in 2008 expected revenues and an expected share count of 107 million, at 3.3x 2008 revenues would also roughly be worth $18.00 per share.