BTIG raises Arcturus stock price target to $58, maintains Buy

On Thursday, BTIG analyst Thomas Shrader updated the price target for Arcturus Therapeutics (NASDAQ:ARCT) to $58 from the previous $57, while reiterating a Buy rating on the stock. The company’s shares, currently trading at $11.95, are near their 52-week low of $11.60, having declined about 46% over the past six months. According to InvestingPro data, analyst targets for the stock range from $44 to $140, suggesting significant potential upside from current levels. Shrader’s revised target follows a visit to AtriCure (NASDAQ:ATRC)’s Investor Day, where the company’s management outlined its financial goals up to the years 2028 and 2030. AtriCure, known for its cardiac surgical devices, has set a target of approximately $750 million in annual revenue and an adjusted EBITDA margin of about 14% for the year 2028. InvestingPro analysis reveals that Arcturus currently maintains a strong liquidity position with a current ratio of 4.67, though it faces near-term challenges with negative EBITDA of $92.12 million in the last twelve months. By 2030, the company aims to reach $1 billion in annual revenue with an adjusted EBITDA margin exceeding 20%.

The projected revenue compound annual growth rate (CAGR) is set at roughly 12.7% from 2024 to 2028, with an acceleration to about 15.5% from 2028 to 2030. This growth is expected to stem from the company’s pipeline developments, including the expansion of indications for prophylactic cardiac ablation and the results from the LeAAPS clinical study. The revenue growth target for 2028 slightly exceeded BTIG’s expectations, which were set around 12.5%, while the profitability goals surpassed their prior forecasts.

During the Investor Day, insights were shared by cardiac surgeons on the design and market potential for the LeAAPS and BoxX-NO AF trials, as well as from electrophysiologists on the role of AtriCure’s Converge in the evolving market of endocardial ablation with pulsed field ablation (PFA). The discussions underscored the significant market opportunity for prophylactic applications in high-risk patient groups that are currently underserved. Additionally, the Converge therapy, unique in its proven efficacy to improve outcomes in long-standing persistent atrial fibrillation (AF), is expected to stabilize and experience growth.

Shrader’s visit also included a tour of AtriCure’s facilities, product demonstrations, and conversations with engineers and clinical support representatives. The experience provided a deeper understanding of AtriCure’s competitive edge and the extensive research and development invested in their product lineup. After updating estimates and maintaining a 4.5x enterprise value/sales multiple on the 12-24 month revenue forecast, Shrader concluded that a slight increase in the price target was warranted, thus setting it at $58 while maintaining a Buy rating on Arcturus Therapeutics stock. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels. Investors can access the comprehensive Pro Research Report, available for over 1,400 US stocks, to dive deeper into Arcturus’s financial health, growth prospects, and market position.

In other recent news, Arcturus Therapeutics reported a significant earnings miss for the fourth quarter of 2024, with earnings per share (EPS) at -$1.11, falling short of the forecasted -$0.19. Revenue also underperformed expectations, coming in at $22.8 million against a projected $63.22 million. Despite these financial challenges, the company maintains a strong cash position with $293.9 million in cash and equivalents. Analysts have adjusted their price targets for Arcturus, with H.C. Wainwright, Canaccord Genuity, and Leerink Partners lowering their targets while maintaining Buy or Outperform ratings.

Arcturus continues to advance its pipeline, with interim data from its cystic fibrosis program expected by the end of the second quarter of 2025. The company’s COVID-19 vaccine, CoStave, has received approval in the European Union, marking a significant milestone. Analysts from BTIG and Canaccord Genuity have expressed optimism about the company’s ongoing research and potential market opportunities. Meanwhile, Arcturus is also progressing in its rare disease programs, targeting cystic fibrosis and ornithine transcarbamylase deficiency, with data expected in mid-2025. These developments underscore Arcturus’s strategic focus on expanding its therapeutic and vaccine pipelines.

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