B.Riley sets Anika stock Buy rating, $21 target

On Thursday, B.Riley began coverage of Anika Therapeutics (NASDAQ: NASDAQ:ANIK), issuing a Buy rating and setting a price target of $21. Currently trading at $13.47, the stock has significant upside potential, with analyst targets ranging from $20 to $28. The firm highlighted Anika’s expertise in hyaluronic acid (HA) production, which spans over three decades, as a key strength in developing products for osteoarthritis (OA) pain management and regenerative solutions.

Anika Therapeutics is recognized as a leader in the U.S. OA pain management sector, where its HA products, Monovisc and Orthovisc, are exclusively distributed by JNJ’s Depuy Synthes. The company maintains strong operational efficiency with a 63.89% gross profit margin. Additionally, Anika holds a leading position in the OA pain management market internationally, with its co-formulated steroid and HA injection, Cingal, available in 40 countries.

The company’s OA pain management business is noted for its strong profitability and cash flow, which are instrumental in funding the development of its regenerative solutions portfolio. According to InvestingPro, Anika maintains a healthy balance sheet with a current ratio of 4.88, indicating strong liquidity. B.Riley anticipates that the product launches from Anika’s regenerative solutions will be the primary catalysts for growth and margin expansion in the future.

Anika launched Integrity, a regenerative implant for tendon repair, in the fourth quarter of 2023, which has been well-received in the market. The positive adoption of Integrity is seen as a promising indication of the company’s potential for continued innovation and expansion within its product offerings. InvestingPro analysis reveals multiple additional growth indicators and insights available to subscribers, including detailed financial health metrics and future earnings projections.

In other recent news, Anika Therapeutics reported its fourth-quarter 2024 earnings, revealing a significant improvement in its earnings per share (EPS) and revenue figures. The company achieved an EPS of -$0.03, substantially outperforming the forecasted -$0.23, and generated revenue of $30.6 million, exceeding expectations of $29 million. Despite these positive results, Anika’s stock experienced a decline, possibly due to concerns over its gross margin, which fell to 56%, a decrease of 13 percentage points from the previous year. Anika’s commercial channel revenue saw a 25% increase, while its OEM channel experienced an 8% decline. The company also completed a $15 million stock repurchase plan ahead of schedule. Furthermore, Anika announced the departure of Chief Operations Officer Anne Nunes, with her responsibilities being absorbed by Stephen Griffin, who will continue as Executive Vice President and Chief Financial Officer. Anika decided to streamline its management structure by eliminating the COO position. These developments reflect Anika’s ongoing efforts to refine its operational strategy and focus on core growth areas.

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