On Tuesday, Baird analysts adjusted their stance on Inari Medical (TASE:PMCN) Inc. (NASDAQ:NARI), downgrading the stock from Outperform to Neutral and slightly reducing the price target to $80 from the previous $81.
This rating change follows the recent announcement that Stryker Corporation (NYSE:NYSE:SYK) will acquire Inari Medical. According to InvestingPro data, NARI shares have surged over 27% in the past week and are currently trading near their 52-week high of $65.94.
The acquisition by Stryker, a move anticipated by Baird, was deemed unsurprising given Stryker's position as a strategic buyer likely to be interested in Inari's leading product offerings and growth trajectory. InvestingPro data shows Inari's impressive 86.8% gross profit margins and strong revenue growth of 22.4% over the last twelve months.
Inari Medical has been on Baird's radar as one of the top picks for fiscal year 2025, particularly due to its market leadership and high-growth portfolio, which is expected to reach a profit inflection point in the first half of 2025.
The agreed acquisition price of $80 per share, which values Inari Medical's equity at approximately $4.9 billion, translates to an enterprise value-to-sales ratio of around 6.7 times for FY25 and 5.8 times for FY26. Baird analysts find this valuation to be reasonable given the circumstances.
Baird also expressed the view that competing offers for Inari Medical are unlikely to surface. This assessment has led to the adjustment of their price target. The new target reflects the acquisition terms and the current market conditions surrounding the deal between Inari Medical and Stryker Corporation.
In other recent news, Stryker Corporation and Inari Medical have announced a definitive agreement for Stryker's acquisition of Inari Medical for $80 per share. Valued at approximately $4.9 billion, this strategic acquisition aims to bolster Stryker's portfolio by integrating Inari's strong position in the rapidly expanding venous thromboembolism (VTE) market. The deal has received unanimous approval from both companies' boards and is expected to close by the end of the first quarter of 2025.
Inari Medical recently reported a record Q3 revenue of $153.4 million, marking a 21% year-over-year increase, and raised its full-year revenue outlook to between $601.5 million and $604.5 million. Evercore ISI reiterated its Outperform rating for Stryker, with a $400.00 price target, while Canaccord Genuity adjusted its stance on Inari Medical, downgrading it from Buy to Hold, but increasing the price target to $80.00.
Inari's ClotTriever Thrombectomy System for deep vein thrombosis has also received national reimbursement approval in Japan, further solidifying its market position. These recent developments underscore Inari's ongoing efforts in new product launches and market penetration in high-growth international markets.
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