Investing.com -- Mirion Technologies shares gained over 3% on Thursday following a new Buy rating from B. Riley, with a price target of $14.
The firm said in a note to clients that Mirion’s strong position in the nuclear medicine and nuclear energy sectors predicts significant growth opportunities in both markets.
According to B. Riley, Mirion is "a market leader in industrial and medical applications related to radiation detection," with top rankings in 16 of 19 product categories.
Despite its dominance, the company has been "under-followed by investors since its SPAC merger in 2021" and remains undervalued, given its revenue of over $800 million and nearly $200 million in adjusted EBITDA.
B. Riley emphasized that Mirion is poised to benefit from global trends favoring nuclear energy and nuclear medicine.
The firm's analysts noted that an increase in the number of healthcare workers exposed to radiation due to the broader use of nuclear medicine will drive demand for the company’s products.
Additionally, nuclear energy's role in meeting clean energy goals and supporting energy-intensive sectors, such as AI computing centers, is expected to position Mirion for continued growth.
The firm also pointed out the favorable impact of a recent CMS update, which offers higher reimbursement rates for novel diagnostic radiopharmaceuticals.
This change could "further incentivize new nuclear medicine development," benefiting Mirion as a key player in the radiopharma value chain.
B. Riley expects Mirion’s top-line revenue to grow 5.7% year-over-year to $846.5 million in 2024, with adjusted EBITDA rising 11.7% to $201.9 million. They base their $14 price target on an 18.6x EV/EBITDA multiple, which aligns with industry peers.