On Tuesday, iRhythm Technologies (NASDAQ:IRTC) received a positive nod from BTIG, as the firm maintained its Buy rating and $125.00 price target on the stock. The endorsement came after iRhythm announced the U.S. Food and Drug Administration (FDA) granted 510(k) clearance for design updates to its Zio AT heart monitoring system.
These updates were previously made through a letter to file, a process for documenting minor changes that don't affect the safety or effectiveness of a device.
The clearance represents one of two 510(k) submissions that iRhythm has under FDA review, aimed at addressing a warning letter previously issued to the company. Earlier in the year, iRhythm submitted the first 510(k) for legacy changes to the Zio AT system and followed with a second submission for new design features and improved labeling.
Management at iRhythm has confirmed that the Zio AT system continues to be commercially available in the United States. They also expressed anticipation for the FDA's decision on the second 510(k) submission, expected in the near future. BTIG's analyst noted satisfaction with the recent development, highlighting that it partially alleviates some of the regulatory concerns surrounding iRhythm.
Shares of iRhythm are anticipated to see an uptick in trading on Wednesday following this announcement. BTIG has not made any adjustments to its financial model for iRhythm, reiterating its Buy rating on the company's stock.
In other recent news, iRhythm Technologies has received clearance from the FDA for its updated Zio AT cardiac monitoring device. The company has also reported a 19.3% year-over-year revenue growth, reaching $148 million and updating its revenue forecast for 2024 to between $580 and $590 million. In terms of expansion, iRhythm has extended its Zio monitor and service to Austria, the Netherlands, Spain, and Switzerland.
In the realm of partnerships, iRhythm has entered into an exclusive licensing agreement with BioIntelliSense, Inc., enhancing its ambulatory cardiac monitoring offerings. The company's Zio ECG monitoring system also received regulatory approval from the Japanese Pharmaceutical and Medical Device Agency.
On the analyst front, Baird has maintained an Outperform rating but cut the price target to $100. Goldman Sachs initiated coverage with a neutral rating, while Canaccord Genuity maintained a Buy rating and increased the price target to $137. These are some of the recent developments for iRhythm Technologies.
InvestingPro Insights
While iRhythm Technologies (NASDAQ:IRTC) received positive news regarding FDA clearance for its Zio AT heart monitoring system, InvestingPro data reveals some financial challenges for the company. Despite a robust revenue growth of 18.81% over the last twelve months as of Q2 2023, reaching $537.09 million, iRhythm is not currently profitable. This aligns with an InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year.
The stock's recent performance has been concerning, with InvestingPro data showing a significant price decline of 37.29% over the past three months and 45.34% over the last six months. This downward trend is reflected in the current stock price of $62.1, which is only 50.03% of its 52-week high.
On a positive note, an InvestingPro Tip suggests that iRhythm operates with a moderate level of debt and its liquid assets exceed short-term obligations, potentially providing some financial stability as the company navigates regulatory challenges and works towards profitability.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for iRhythm Technologies, providing deeper insights into the company's financial health and market position.
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