On Tuesday, Baird increased its price target for Inari Medical Inc. (NASDAQ:NARI) to $65 from $62, while retaining an Outperform rating on the stock. The firm anticipates that the company will report better-than-expected results for the second quarter and raise its future guidance. This adjustment reflects a positive outlook on the company's performance as it approaches its quarterly financial report.
The analyst from Baird noted that the current market valuations, especially considering potential pair trading with PEN, indicate that a strong quarterly performance could support the stock price. Despite previously expecting Inari Medical's stock multiple to revert back to lower levels after quarterly earnings reports, the company is not entering the second quarter at trough levels, which has led to a more cautious stance than in previous quarters.
Since the first quarter earnings announcement, investor sentiment towards Inari Medical has seen an improvement. This change is attributed to a better understanding of the conservative nature of the management's full-year 2024 guidance. If Inari Medical manages to outperform in the second quarter, the analyst believes that the company's stock multiple, which is currently below that of its peers, has the potential to remain stable or even improve.
Inari Medical's stock performance and valuation will likely be closely watched as the company prepares to release its second-quarter financial results. The firm's adjusted price target and the maintained Outperform rating suggest confidence in Inari Medical's ability to exceed market expectations and potentially adjust its financial outlook upwards.
In other recent news, Inari Medical Inc. reported a strong Q1 performance, with revenue reaching $143.2 million, surpassing both the Street's projection and analysts' estimates. This revenue beat, primarily attributed to the U.S. core venous thromboembolism (VTE) treatments, resulted in a 23% year-over-year increase. Despite this, the company's GAAP EPS was affected by several deal-related expenses, making it not directly comparable to the consensus estimate of a $0.16 loss per share.
Inari Medical also raised its full-year revenue guidance to between $592.5 million and $602.5 million, indicating a 20-22% year-over-year increase. Piper Sandler, Canaccord Genuity, and Needham have all adjusted their price targets for Inari Medical following these developments, but they maintain their neutral to positive stances on the stock.
The company's management highlighted its three primary growth drivers: VTE treatments, Emerging Therapies, and international expansion. Despite a GAAP operating loss of $17.2 million and a net loss of $24.2 million in Q1, Inari remains optimistic about its market position and plans to expand into new markets such as China and Japan later this year.
InvestingPro Insights
In light of Baird's optimistic stance on Inari Medical Inc., real-time data from InvestingPro offers additional context for investors considering the stock. With a market capitalization of $3.19 billion, Inari Medical is positioned as a significant player in its sector. The company's gross profit margin stands at an impressive 87.67% for the last twelve months as of Q1 2024, highlighting its efficiency in managing production costs relative to sales.
InvestingPro Tips indicate that while Inari Medical operates with a moderate level of debt, it's important to note that the company has not been profitable over the last twelve months, with a negative return on assets of -4.04%. Nevertheless, the company's liquid assets exceed its short-term obligations, which may provide some financial flexibility. Additionally, Inari Medical has experienced a strong return over the last three months, with a total return of 40.15%, suggesting robust short-term investor confidence.
For investors looking for deeper analysis and more InvestingPro Tips, there are additional insights available at https://www.investing.com/pro/NARI. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking a wealth of financial data and expert tips. With 6 more InvestingPro Tips available for Inari Medical, savvy investors can make informed decisions based on comprehensive market data.
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