Boral Capital sets Pulmonx stock Buy rating, $17 target

On Monday, Boral (OTC:BOALY) Capital initiated coverage on Pulmonx Corp . (NASDAQ:LUNG), a medical technology company focused on developing treatments for severe emphysema, with a Buy rating and a price target of $17.00. Currently trading at $7.48, the stock shows significant upside potential according to InvestingPro data, with analyst targets ranging from $8 to $16. Pulmonx’s leading product, the Zephyr Endobronchial Valve, represents the first FDA-approved minimally invasive device designed for lung volume reduction, providing an alternative to more invasive surgical procedures.

According to Boral Capital, Pulmonx stands to benefit from increasing physician adoption and strong reimbursement tailwinds, as well as opportunities for international expansion. The company’s impressive 22% revenue growth in the last twelve months and robust gross profit margin of 74% support this positive outlook. These factors contribute to the firm’s positive outlook on the company’s potential for significant growth in the market.

The Zephyr Valve’s unique position as a minimally invasive treatment option is particularly noteworthy in the field of chronic obstructive pulmonary disease (COPD), where patients often face limited treatment choices. The device offers a new avenue for patients with severe emphysema, a debilitating condition that is a subset of COPD, to improve their quality of life without undergoing major surgery.

Boral Capital’s initiation of coverage with a Buy rating reflects confidence in Pulmonx’s market strategy and the clinical value of its Zephyr Valve. The $17.00 price target suggests a positive trajectory for the company’s stock, as it continues to make inroads into the COPD treatment market.

Pulmonx’s emphasis on innovation and the development of minimally invasive treatment options is a key factor in their growth strategy, as outlined by Boral Capital. The firm’s coverage initiation marks an important moment for Pulmonx, highlighting the company’s potential in the medical technology sector. InvestingPro analysis reveals the company maintains strong liquidity with a current ratio of 5.58 and holds more cash than debt on its balance sheet. For deeper insights into Pulmonx’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, Pulmonx Corp reported a strong fourth-quarter performance in 2024, with revenue reaching $23.8 million, marking a 23% increase from the previous year. This revenue figure exceeded the consensus estimate of $22.3 million, driven by significant international growth of 42% and a 16% increase in U.S. sales. The company also reported an earnings per share (EPS) of -$0.33, which surpassed the forecasted -$0.4475, reflecting improved financial performance. Despite a slight compression in gross margins to 74.0% from 74.7%, Pulmonx’s adjusted EBITDA loss improved to $7.5 million, better than the anticipated $11.4 million loss.

Citi analysts responded to these results by raising Pulmonx’s stock price target from $7.50 to $8.00, while maintaining a Neutral rating, citing the record revenue as a key factor. Pulmonx’s management provided guidance for 2025, projecting revenue between $96 million and $98 million, representing a growth of 16%-18%, which brackets the consensus estimate of $97.7 million. The company continues to focus on expanding its product offerings and international presence, with plans to launch new products like the ARISEAL and expand into new markets.

These developments highlight Pulmonx’s strategic focus on driving growth through physician adoption, new product launches, and geographic expansion. The company remains committed to establishing its Zephyr valve as a standard treatment for COPD patients, despite ongoing challenges such as net losses and competitive pressures. Pulmonx’s cash position at the end of 2024 stood at $101.5 million, with plans to scale growth initiatives in 2025, further emphasizing its focus on long-term growth strategies.

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