TD Cowen has initiated coverage on shares of Allurion Technologies (NYSE: ALUR), giving the stock a Buy rating with a price target of $2.00.
The firm's assessment highlights Allurion's positioning in the global obesity market and the potential of its intragastric balloon technology, which is noted for not requiring anesthesia or endoscopy, providing durable weight loss, and being safer than previous-generation devices.
The analyst from TD Cowen pointed out the significance of the upcoming year-end readout of the US Audacity trial, which is anticipated to be a major positive catalyst for Allurion Technologies' stock. This trial's results are expected to play a crucial role in the future performance of the company's shares.
Allurion Technologies is focused on addressing the needs of the large and rapidly expanding global obesity market. Its product, an intragastric balloon, is designed to aid in weight loss and has the advantage of being a less invasive procedure compared to traditional methods.
In other recent news, Allurion Technologies has reported significant developments. The company noted an average weight loss of 12.5% in a study involving their Allurion Program.
The study, which synthesized data from 2,107 patients, also highlighted a decrease in body mass index (BMI) and improvements in metabolic health markers. Furthermore, Allurion reported a 25% increase in Q2 revenue, reaching $11.8 million. Despite this, the company revised its 2024 revenue guidance to $40 to $45 million due to regulatory and macroeconomic challenges.
In terms of analyst coverage, Roth/MKM initiated a Buy rating on Allurion, emphasizing the potential U.S. approval of the company's weight-loss balloon. Chardan Capital Markets also maintained a Buy rating but reduced the price target to $2.50. Allurion has also appointed Keith Johns to its Board of Directors, bringing his extensive experience from the metabolic drug industry.
In other studies, Allurion reported safe and sustained weight loss in adolescents and patients using its program. However, the company faces a potential delisting from the New York Stock Exchange due to non-compliance with the exchange's minimum share price requirement but plans to address this issue within the allotted six-month cure period.
InvestingPro Insights
Recent InvestingPro data provides additional context to TD Cowen's optimistic outlook on Allurion Technologies (NYSE:ALUR). The company's market cap stands at $37.64 million, reflecting its current position in the obesity treatment market. Despite the positive analyst rating, InvestingPro Tips highlight some challenges: the company is operating with a significant debt burden and may have trouble making interest payments. This financial strain is evident in the company's negative operating income of -$66.23 million for the last twelve months as of Q2 2024.
On the brighter side, Allurion boasts impressive gross profit margins of 76.19%, which aligns with TD Cowen's positive view on the company's product potential. However, the stock has taken a significant hit, with a one-year price total return of -87.5%, placing it near its 52-week low. This current valuation could present an opportunity if the upcoming US Audacity trial results are favorable, as anticipated by TD Cowen.
Investors seeking a more comprehensive analysis can access 16 additional InvestingPro Tips for Allurion Technologies, offering deeper insights into the company's financial health and market position.
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