BTIG maintains Spectral AI stock Buy rating and $3 target

Friday – BTIG analysts have reaffirmed their Buy rating and $3.00 price target on Spectral AI (NASDAQ:MDAI), following the company’s fourth-quarter 2024 financial results. Spectral AI reported revenue of $7.6 million, surpassing BTIG’s estimates of $6.0 million. However, the reported loss per share (LPS) of $(0.41) was greater than the anticipated $(0.18). The company, currently valued at approximately $25 million in market capitalization, has demonstrated strong revenue growth of 45% over the last twelve months, according to InvestingPro data.

Spectral AI has provided guidance for fiscal year 2025, projecting revenues of approximately $21.5 million, which represents a year-over-year decline of 27.3%. This forecast comes as the company anticipates a slight decrease in R&D revenue, just ahead of the expected U.S. launch of its DeepView medical imaging product.

While quarterly results are considered less significant compared to the company’s progress toward regulatory and commercial milestones, Spectral AI has been steadily advancing. The company recently announced positive data from a U.S. burn trial and is actively seeking feedback in the UK and Australia for DeepView, with publications on the product expected soon. Despite current challenges, analyst price targets range from $3.00 to $8.10, reflecting confidence in the company’s potential.

The company aims to submit DeepView to the FDA by the end of the second quarter of 2025, with approval anticipated in early fiscal year 2026. Despite the focus on Spectral AI’s balance sheet, the management has secured additional cash to support operations. The company concluded fiscal year 2024 with a pro-forma cash position of approximately $16.4 million, bolstered by a substantial contract with the Biomedical Advanced Research and Development Authority (BARDA).

In their analysis, BTIG highlights the company’s progression against key milestones and maintains a positive outlook on the stock’s potential for growth as these milestones are reached.

In other recent news, Spectral AI reported record-breaking financial results for 2024, with a remarkable 63.5% increase in research and development revenue, reaching $29.6 million. The company also improved its gross margins to 44.9% and reduced general and administrative expenses, demonstrating effective cost management. Spectral AI’s plans to spin off its intellectual property subsidiary, Spectral IP, into an independent publicly traded company were announced, with the transaction expected to complete within the next ninety days. The company is preparing for an FDA submission for its DeepView system, aiming for clearance in 2026. Analysts from firms like Northland Capital Markets and BTIG have shown interest in Spectral AI’s commercialization strategy and its progress towards FDA approval. Spectral AI forecasts a revenue of approximately $21.5 million for fiscal year 2025, excluding potential sales in the UK and Australia. The company has also successfully deployed its DeepView system in Australia, marking a significant step in its global expansion efforts.

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