BTIG raises iRhythm stock price target to $140 on Q1 sales beat

Published 02/05/2025, 11:24
BTIG raises iRhythm stock price target to $140 on Q1 sales beat

On Friday, BTIG analyst Marie Thibault adjusted the price target for iRhythm Technologies (NASDAQ:IRTC) shares, increasing it to $140 from $135, while reiterating a Buy rating on the stock. The adjustment follows iRhythm’s announcement of a first-quarter sales performance that surpassed expectations. The company reported revenue of $158.7 million, which is a 20% increase year-over-year and over $5 million above the consensus estimate of $153.4 million. According to InvestingPro data, this performance aligns with the company’s impressive 20.13% revenue growth over the last twelve months, though current market valuation suggests the stock may be trading above its Fair Value.

The sales outperformance was attributed chiefly to a record quarter for Zio AT, iRhythm’s ambulatory cardiac monitoring technology. The company benefited from market share gains following a competitor’s disruption in the previous quarter and from new account openings. The demand for Zio Monitor was robust, with nearly one-third of the volume coming from primary care physician prescribers at the end of the quarter. Additionally, partnerships aimed at identifying undiagnosed arrhythmias in high-risk patients contributed to the sales beat. InvestingPro analysis reveals the company maintains a strong financial position with a healthy gross profit margin of 68.86% and excellent liquidity, as indicated by a current ratio of 5.82.

iRhythm also reported an adjusted EBITDA beat, posting a loss of $2.5 million, which was less than the anticipated loss of $5.1 million. Building on this positive start to the year, iRhythm raised its 2025 sales outlook to a range of $690-$700 million, which represents a 17.4% year-over-year increase at the midpoint. The company also updated its full-year adjusted EBITDA guidance to 7.5-8.5%.

The company is actively addressing the outstanding FDA warning letter and 483 observations, with a target to complete remediation efforts by mid-2025. iRhythm’s internal compliance initiatives are expected to conclude by the end of this year, and the submission timelines for Zio MCT remain on track for the third quarter.

Thibault noted that iRhythm is effectively navigating through macroeconomic challenges, showcasing strong performance across all products and channels. She emphasized the company’s position as one of the most resilient in the medical technology sector, underpinned by solid and sustainable fundamentals. The new price target of $140 is based on a roughly 5.5x enterprise value to sales multiple on the firm’s 12-24 month revenue estimate. For deeper insights into iRhythm’s valuation and growth prospects, investors can access comprehensive financial analysis and additional ProTips through InvestingPro’s detailed research reports, which provide expert analysis on over 1,400 US stocks.

In other recent news, iRhythm Technologies announced its financial results for the first quarter of 2025, reporting a significant revenue increase of 20.3% year-over-year, amounting to $158.7 million. This figure surpassed analyst expectations, which were set at $153.49 million. The company also reported an adjusted net loss of $0.95 per share, slightly better than the anticipated loss of $0.96 per share. Following these results, iRhythm raised its full-year 2025 revenue guidance to between $690 million and $700 million. The company is also preparing for the launch of its new Zio MCT product in the third quarter of 2025. Additionally, iRhythm is expanding its market presence, particularly in primary care, which now accounts for over a third of its prescription volume. Analyst firms have taken note of iRhythm’s growth trajectory, with no specific upgrades or downgrades reported in the latest updates. The company continues to focus on expanding its Zio AT product line and anticipates submitting its new Zio MCT product to the FDA in the third quarter of this year.

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