On Wednesday, Canaccord Genuity maintained its Buy rating on shares of CVRx Inc (NASDAQ: CVRX) and increased the price target to $17 from $15 following the company's third-quarter earnings report. CVRx exceeded revenue expectations for Q3 2024, posting $13.4 million, marking a 27% year-over-year increase. This figure surpassed both Canaccord's projection of $12.9 million and the consensus estimate of $13.2 million.
The United States heart failure (HF) revenue contributed significantly with $12.2 million, a 30% increase compared to the previous year, outperforming the estimated $11.8 million. During the quarter, CVRx sold 391 HF units, ahead of the forecast of 388 units, and reported 208 active accounts, which also exceeded the estimate of 203.
CVRx has refined its full-year 2024 guidance, prompting Canaccord to revise its fourth-quarter revenue estimates to reflect the company's ongoing momentum. However, the analyst has lowered the revenue estimates for 2025 based on management commentary and a comparison with street estimates that suggested the initial model might have been overly optimistic.
The company's new Chief Medical Officer (CMO) has focused on educational initiatives to stimulate growth, leading to an increase in selling, general, and administrative (SG&A) expenses for the quarter. Despite this, the operational expenditure (OpEx) guidance for the year has been slightly increased, though it implies a quarter-over-quarter decline in the fourth quarter.
CVRx management expressed strong confidence in the impending outpatient reimbursement decision, anticipated in the coming days, and highlighted recent successes with inpatient/CAT I code. They also noted that even if reimbursement is affected, they do not foresee any decline in the average selling price (ASP).
Lastly, CVRx took proactive financial steps by drawing down its remaining debt of approximately $20 million and using its at-the-market (ATM) offering to raise an additional $20 million, totaling $40.3 million in cash for the quarter. This move is expected to alleviate any immediate financial pressures on the company's stock.
With these developments, Canaccord reaffirms its positive stance on CVRx and adjusts the price target to reflect the company's solid performance and strategic initiatives.
In other recent news, CVRx Inc. has made significant strides in the medical field. The company reported a 24% increase in Q2 revenue, hitting $11.8 million, despite a $14 million net loss. Furthermore, CVRx projects total revenue between $50 million and $53 million for 2024.
The American Medical Association has approved new codes for CVRx's Barostim heart failure therapy, which is expected to enhance reimbursement for healthcare providers and expand patient access to the procedure starting January 1, 2026.
Analyst firms have also revised their outlook on CVRx. Cantor Fitzgerald reaffirmed its confidence in the company, maintaining an Overweight rating and a $14.00 price target. On the other hand, Piper Sandler lowered its target to $13, while Canaccord Genuity raised its target to $15.
In corporate developments, CVRx expanded its Board of Directors with the appointment of Kevin Ballinger and Mitch Hill. Moreover, the company secured an additional $20 million loan tranche from Innovatus Life Sciences Fund I, LP, bringing its total outstanding term loans to $50 million.
Finally, the Centers for Medicare and Medicaid Services have increased the reimbursement for CVRx's Barostim implant procedure from a range of $17,000-$23,000 to approximately $43,000, effective in 2024. These are the latest developments in CVRx's journey.
InvestingPro Insights
CVRx's recent financial performance and strategic moves are reflected in the latest InvestingPro data and tips. The company's revenue growth remains strong, with a 43.94% increase in the last twelve months as of Q2 2024, aligning with the impressive 27% year-over-year growth reported in Q3. This robust revenue trajectory supports Canaccord's optimistic outlook.
InvestingPro Tips highlight that CVRx holds more cash than debt on its balance sheet, which is particularly relevant given the company's recent move to draw down debt and raise additional funds through its ATM offering. This financial strategy has bolstered the company's liquidity position, with InvestingPro data showing that liquid assets exceed short-term obligations.
Despite the positive revenue growth, it's worth noting that CVRx is not currently profitable, with a negative operating income margin of -124.78% in the last twelve months. This aligns with the InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year. However, the strong return over the last three months, as mentioned in another InvestingPro Tip, reflects the market's positive reaction to CVRx's recent performance and strategic initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for CVRx, providing a deeper understanding of the company's financial health and market position.
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