On Thursday, Baird initiated coverage on Mirion Technologies (NYSE: MIR) stock, a company specializing in nuclear detection and measurement, with an Outperform rating and a price target of $22.00. Currently trading at $17.44, the stock has shown remarkable momentum with a 70% gain year-to-date.
The firm's analyst cited several factors for the positive outlook, including Mirion Technologies' strong ties to growing sectors such as commercial nuclear power, which accounts for approximately 40% of the company's sales, and the nuclear medicine markets.
Mirion Technologies has demonstrated a solid track record, posting an organic compound annual growth rate (CAGR) of over 6% since the year 2020, with current revenue growth at 6.15%. This performance is underpinned by the company's extensive installed base and strong liquidity position, with a current ratio of 2.16, which ensures a steady flow of recurring and replacement revenue, contributing to the company's financial stability and potential for growth. According to InvestingPro analysis, while not currently profitable, analysts expect the company to achieve profitability this year.
The analyst also pointed out that Mirion Technologies is poised to benefit from internal operational excellence initiatives. These are expected to drive improvements in EBITDA margins and free cash flow (FCF), with projections of low double-digit to mid-teen percentage growth in these financial metrics over the near to intermediate term. InvestingPro subscribers can access 8 additional key tips and a comprehensive analysis of Mirion's financial health, which currently shows a "GOOD" overall rating.
The firm's outlook reflects a belief in Mirion Technologies' ability to leverage its market position and operational strategies to enhance its growth prospects. The $22.00 price target suggests a potential for stock appreciation from current levels, although the exact current stock price was not mentioned in the context provided.
Mirion Technologies' focus on sectors with multi-year, secular growth opportunities is seen as a key driver for the company's forward momentum, according to Baird's analysis. The company's financial and operational strategies are anticipated to contribute to its positive trajectory in the coming years.
In other recent news, Mirion Technologies has shown notable growth in its third-quarter earnings, reporting an 8% revenue increase to $207 million and an adjusted EPS of $0.08. The company's organic growth forecast for 2024 has been raised, signaling strong demand in nuclear-related end-markets and potential new order opportunities worth between $300 million and $400 million by the end of 2025.
The company's backlog currently stands at $815 million, up 2% from last year, indicating a robust pipeline, particularly in the nuclear sector. Mirion Technologies also reaffirmed its full-year 2024 adjusted EBITDA guidance of $195 million to $205 million and its EPS forecast of $0.37 to $0.42.
Citi has revised its price target for Mirion Technologies to $20.00, up from the previous $18.00, while maintaining a Buy rating on the stock. Goldman Sachs (NYSE:GS) also adjusted its outlook, increasing the price target to $16.00, reflecting a positive view on the growing momentum in nuclear new builds.
In terms of company developments, Mirion Technologies secured two significant contracts for the Sizewell C project, contributing to a shift of $30 million in orders from Q2 to Q3. However, the company faced a setback with the de-booking of half of a Turkish new build award valued at $21 million due to contractual disputes. These are among the recent developments at Mirion Technologies.
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