Shares of Penumbra (PEN) are down 5% in early trading after short-selling focused research firm Spruce Point issued a short report on the stock, outlining their thesis why the share price is at risk for 40%-55% downside risk.

Analysts have grown to understand Penumbra as a dominant player in its vertical of treating thrombosis with an aspiration catheter cleared by the FDA for treatment of acute ischemic stroke, said Spruce Point.

However, Penumbra is "losing U.S. share so rapidly that monthly unit sales have been down through five of the last six months, with monthly declines of up to 28%," contends Spruce Point. Large medical device companies have had little trouble entering the aspiration catheter market with products "already equivalent or superior to Penumbra's," said Spruce Point in its report. In early trading, Penumbra shares are down $8.84, or 4.9%, to $170.65.

Reference Link: Spruce Point.