On Tuesday, Truist Securities adjusted its price target for Inari Medical Inc. (NASDAQ: NARI), increasing it to $50.00 from the previous target of $46.00, while maintaining a Hold rating on the stock. The revision follows Inari Medical's third-quarter earnings, which surpassed expectations, potentially aiding the stock to recover from its recent decline. After the market closed, the stock saw a 9% increase.
The analyst noted that Inari's performance in the U.S. Venous Thromboembolism (VTE) market demonstrated approximately 16% growth, which, despite trailing the overall market, indicated some acceleration. Inari Medical's better-than-anticipated operational loss and an improved outlook for the fourth quarter, projecting a break-even result on a GAAP basis, are expected to be well received in the small to mid-cap (SMID) Medical Technology sector, which favors companies with improving profit trajectories.
Additionally, the company is set to present its PEERLESS study at the Transcatheter Cardiovascular Therapeutics (TCT) conference on October 29, 2024. This presentation is anticipated to provide a minor incremental push for the underlying Pulmonary Embolism (PE) market growth. However, the analyst believes that head-to-head data comparing Inari's solutions to anticoagulants will be a more significant driver for the category, although results from such trials are still several years away.
The price target has been raised based on a higher earnings multiple and estimates. The analyst reiterated the Hold rating, suggesting a neutral stance on the stock's investment potential at this time.
In other recent news, Inari Medical reported a third-quarter revenue of $153.4 million, marking a 21.4% increase year-over-year, surpassing the consensus estimate of $150.7 million. The company raised its full-year revenue outlook to between $601.5 million and $604.5 million, representing a 21.9-22.5% year-over-year increase. The operating loss for the reported quarter improved, narrowing to $13.6 million.
Analysts at BTIG have maintained their Buy rating on Inari Medical, citing strong third-quarter results. Baird also increased the stock price target for Inari Medical to $66, maintaining an Outperform rating. Meanwhile, Needham maintained a Hold rating on the company, while Stifel initiated coverage with a Hold rating and a $50 price target.
Inari Medical is set to present findings from its PEERLESS randomized controlled trial at the upcoming Transcatheter Cardiovascular Therapeutics meeting. The trial compares Inari's FlowTriever system to traditional treatments for pulmonary embolism. Inari Medical's strategy includes maintaining growth in the U.S. VTE segment, expanding into new geographic markets, and introducing new products aimed at long-term growth.
InvestingPro Insights
Inari Medical's recent performance and market position can be further illuminated by data from InvestingPro. The company's impressive gross profit margin of 87.15% for the last twelve months as of Q2 2024 aligns with one of the InvestingPro Tips highlighting "impressive gross profit margins." This strong margin suggests efficient cost management and potentially robust pricing power in the VTE market.
However, investors should note that Inari Medical is currently not profitable, with a negative operating income margin of -3.76% over the same period. This aligns with another InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year. Despite this, the company's revenue growth remains strong at 24.67% over the last twelve months, which supports the analyst's observation of accelerating growth in the U.S. VTE market.
The current Price to Book ratio of 5.85 corroborates the InvestingPro Tip that the company is "trading at a high Price / Book multiple," suggesting investors are placing a premium on the company's assets, possibly due to growth expectations.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Inari Medical, providing a deeper understanding of the company's financial health and market position.
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