On Friday, H.C. Wainwright maintained a Buy rating on shares of EDAP TMS S.A. (NASDAQ: NASDAQ:EDAP), with a stable price target of $19.00. The firm's stance comes in light of EDAP's reported revenue of €5.8 million in the first quarter of 2024, marking a 10% year-over-year increase from €5.3 million in the same quarter the previous year. This growth is attributed primarily to a significant 92% rise in procedure volume, signaling strong adoption by urologists.
EDAP's revenue increase is supported by the positive reception of the final data from the HIFI study at the American Urological Association's annual meeting in 2024. The data showed that High-Intensity Focused Ultrasound (HIFU) procedures have a comparable salvage treatment-free survival rate to radical prostatectomy at 30 months, with the added benefit of preserving urinary control and sexual functions. These findings are expected to further promote the use of HIFU in treating prostate cancer both domestically and internationally.
In the first quarter of 2024, EDAP matched its previous year's performance by placing seven Focal One units, including five capital sales. The company is expanding its reach by entering new geographic markets and adding systems in existing U.S. hospitals. Notably, EDAP has placed a second system in Taiwan and anticipates growth in that region. Prospects in Switzerland and France are also promising, especially with the French National Authority for Health recommending HIFU procedure reimbursement for prostate cancer treatment, with a final decision anticipated later this year.
The firm projects that HIFU-related revenues could increase to €144 million by 2031, up from €27 million in 2024. EDAP is also conducting a Phase 3 study on Focal One HIFU for treating deep infiltrating rectal endometriosis, with data expected in the second half of 2024. Positive outcomes could lead to a product launch in the U.S. and EU in 2025.
InvestingPro Insights
With H.C. Wainwright's recent Buy rating on EDAP TMS S.A., investors may find additional context through key metrics and insights from InvestingPro. The company's market capitalization stands at $255.65 million, and despite a challenging profitability outlook with a negative P/E ratio of -12.74 for the last twelve months as of Q4 2023, EDAP has shown a robust revenue growth of 9.64% over the same period. This growth is further highlighted by the impressive 24.77% quarterly revenue increase in Q4 2023, indicating a solid uptrend in the company's sales.
Investors should note that EDAP holds more cash than debt on its balance sheet, which is a reassuring sign of financial stability. Moreover, liquid assets exceed short-term obligations, providing the company with a cushion to manage its immediate financial needs. This is particularly relevant given that analysts do not anticipate the company will be profitable this year, as reflected by the negative operating income margin of -27.16%. However, the company's large price uptick over the last six months, with a 47.54% return, could suggest market optimism about its growth potential, especially considering the strong return over the last five years.
For those interested in deeper analysis, there are additional InvestingPro Tips available on the platform, which include insights such as EDAP's lack of dividend payments to shareholders and its performance metrics. Utilize coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for more comprehensive investment strategies and data. Currently, there are six additional InvestingPro Tips available for EDAP, which could further guide investment decisions.
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