On Tuesday, Lake Street Capital Markets began coverage on Treace Medical (TASE:PMCN) Concepts Inc (NASDAQ:TMCI), assigning a Buy rating to the company's stock with a price target set at $14.50.
According to InvestingPro data, the company has demonstrated solid revenue growth of 16.14% over the last twelve months, despite currently trading near $7.15, significantly below its 52-week high of $15.98.
The firm's analysts highlighted Treace Medical's establishment of a robust franchise in the bunion correction space, which is considered one of the fastest-growing segments within the foot and ankle orthopedics market, with an estimated compound annual growth rate of 7%-8%.
Despite the broader market's unfavorable disposition towards Treace Medical's shares over the previous 18 months, which led to a general retreat by sell-side analysts, the company has continued to expand. InvestingPro analysis shows the company maintains a strong liquidity position with a current ratio of 4.12, while operating with a moderate level of debt.
For deeper insights into TMCI's financial health and growth prospects, InvestingPro offers additional analysis through its comprehensive Pro Research Report, available with subscription. Treace Medical has recently introduced two new osteotomy solutions, expanding its reach to approximately 70% of the bunion market that it had not previously tapped into.
The analysts also noted an impending boost for the company, as the Centers for Medicare & Medicaid Services (CMS) is set to double the reimbursement for Treace Medical's flagship Lapiplasty procedure starting tomorrow. This change is expected to have a positive impact on the company's financial performance.
The endorsement from Lake Street comes with the perspective that Treace Medical stands out as a highly attractive acquisition target. The firm's initiation of coverage with a Buy rating and a price target of $14.50 reflects confidence in the company's potential for growth and value creation in the orthopedic medical device market.
While the company maintains an impressive gross profit margin of 80.61%, InvestingPro data indicates it's currently fairly valued based on their proprietary Fair Value model.
In other recent news, Treace Medical Concepts reported an 11% increase in third-quarter revenue, reaching a total of $45.1 million. This growth was primarily driven by the adoption of new technologies and an increase in active surgeon users. Despite a net loss of $15.4 million for the quarter, the company saw an improvement compared to the previous year's $17.5 million loss. Looking ahead, the company revised its full-year 2024 revenue guidance to $204 million to $211 million, suggesting a 9% to 13% year-over-year growth.
Additionally, Treace Medical anticipates a 50% improvement in adjusted EBITDA. Other company developments include the limited market release of the Nanoplasty 3D MIS system, a patent infringement lawsuit filed against Stryker Corporation (NYSE:SYK), and the reassignment of CPT code 28297 for Lapidus Fusion, which is expected to increase hospital outpatient and ASC payment rates for 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.