On Wednesday, BTIG adjusted its price target for AtriCure Inc. (NASDAQ:ATRC), a medical device company, to $53.00, down from the previous target of $58.00. The firm has retained its Buy rating on the stock.
AtriCure's second-quarter revenue was reported at $116.3 million, a year-over-year increase of 15.2% as reported and 15.4% on a constant currency basis, aligning with the consensus estimate of $116.2 million.
In the United States, AtriCure's Q2 revenue reached $95.5 million, marking a 12.5% year-over-year increase but falling short of the consensus estimate of $97.1 million. International revenue outperformed expectations at $20.7 million, which is a 29.4% increase as reported and a 30.4% rise on a constant currency basis, surpassing the consensus of $19.0 million. The U.S. Appendage Management segment saw Q2 sales of $37.9 million, slightly below the consensus by $400K.
The company experienced accelerated growth in its Open AtriClip franchise, approximately 17% year-over-year, despite increased competition. AtriCure has also announced that its 8th-generation Flex (NASDAQ:FLEX) Mini device received FDA clearance, which supports the company's outlook for continued growth in this segment. However, U.S. sales were impacted by slower growth in the Converge product as the market shifts focus toward pulsed field ablation (PFA) technologies.
As a result of these dynamics, AtriCure has revised its full-year revenue guidance to a range of $456 million to $461 million, reflecting an approximate 15% increase year-over-year at the midpoint, down from the previous forecast of $459 million to $466 million.
The consensus estimate was $461.9 million. Despite this adjustment, the company reported positives such as U.S. Pain Management and international business beats, as well as operating expense leverage that led to a slight adjusted EBITDA beat.
AtriCure's guidance for adjusted EBITDA and adjusted loss per share (LPS) for 2024 remains unchanged at $26 million to $29 million and ($0.82) to ($0.74), respectively. While acknowledging that PFA may present a challenge in the upcoming quarters, BTIG remains positive on AtriCure's long-term growth potential, citing new product launches, international expansion, profitability improvements, and acceleration in Open Clip sales as reasons for maintaining a Buy rating. The new price target of $53 reflects a revised valuation multiple from 5x to 4.5x.
In other recent news, AtriCure Inc. reported strong financial performance for the first quarter of 2024. The company's revenue reached $108.9 million, marking a 16.5% year-over-year increase, exceeding the estimates set by Canaccord Genuity and Needham. AtriCure has also reaffirmed its full-year 2024 guidance, projecting revenues between $459 million and $466 million, which would represent a growth of 15% to 17% year-over-year, along with an adjusted EBITDA ranging from $26 million to $29 million.
Despite the positive financial results, Canaccord Genuity, Needham, and BTIG have all reduced their price targets for AtriCure's shares, while maintaining their Buy ratings. The reductions are attributed to a contraction in the multiples of peer companies, affecting the valuation landscape for the medical device sector.
Recent developments also reveal that AtriCure's Minimally Invasive Ablation business, especially the EPi-Sense product line, performed well in the quarter. However, the company's Appendage Management segment underperformed, particularly in the U.S. market. Despite the challenging dynamics, Canaccord Genuity and Needham view the current situation as a buying opportunity for AtriCure's shares.
InvestingPro Insights
As BTIG adjusts its price target for AtriCure Inc., it's crucial to consider the company's current financial health and market performance. According to recent data from InvestingPro, AtriCure's market capitalization stands at $1.06 billion, indicating its size and market share within the medical device industry. Despite the company's revenue growth over the last twelve months, which was a solid 18.7%, AtriCure's P/E ratio remains negative at -26.71, reflecting analysts' concerns that the company will not be profitable this year. Additionally, the stock's recent performance has seen a significant downturn, with a 1-week price total return of -8.3% and a 1-year price total return of -60.25%, underscoring the volatility and challenges faced by the stock.
From an operational standpoint, AtriCure's gross profit margin is robust at 75.26%, a testament to the company's ability to maintain profitability on its products. However, the InvestingPro Tips suggest that while the company has liquid assets to cover short-term obligations and operates with a moderate level of debt, it has not been profitable over the last twelve months and does not pay dividends to shareholders. For investors seeking to dive deeper into AtriCure's financials and future prospects, InvestingPro offers additional tips and insights. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and discover the many other tips available on InvestingPro that could help inform your investment decisions.
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