BTIG raises Outset Medical stock target to $45 post-split

On Friday, BTIG analysts adjusted the price target for Outset Medical (TASE:BLWV) Inc. (NASDAQ:OM) to $45.00, a significant increase from the previous target of $3.00. Currently trading at $9.90, the stock has shown remarkable momentum with a 36% gain over the past week. The firm continues to recommend a Buy rating for the stock, aligning with broader analyst sentiment. According to InvestingPro data, analyst targets range from $45 to $90, suggesting significant upside potential.

The revision comes after Outset Medical implemented a one-for-fifteen reverse stock split, which took effect before the market opened on Thursday. BTIG analyst Maria Thibault updated the firm’s financial model to reflect the new share count and made slight adjustments to the depreciation and amortization forecast based on the fourth quarter actual cash flow statement. InvestingPro analysis indicates the company maintains a Fair financial health score, with three analysts recently revising earnings estimates upward for the upcoming period.

Thibault’s report indicates that the new price target is consistent with the previous valuation, applying the same approximately 5x enterprise value to sales multiple to the company’s projected revenue over the next 12 to 24 months. The adjustment to the price target is purely mathematical, following the reverse stock split, and does not represent a change in the underlying fundamentals or the analyst’s view of the company’s value.

The updated model, which can be found on pages 3 and 4 of the report, does not introduce any other changes to the forecast. Thibault reiterated the Buy rating, signaling confidence in the company’s prospects.

Outset Medical’s reverse stock split was a strategic move to adjust the number of shares outstanding, and this price target update is a direct consequence of that corporate action. BTIG’s revised target of $45 takes into account the reduced share count post-split, providing investors with an updated reference point for the stock’s value. The company maintains strong liquidity with a current ratio of 5.69, indicating robust short-term financial stability. For deeper insights into Outset Medical’s valuation and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, Outset Medical reported its fourth-quarter earnings for 2024, surpassing analyst expectations with an earnings per share (EPS) of -$0.37, compared to the forecasted -$0.43. The company’s revenue reached $29.5 million, slightly above projections, despite a year-over-year decline. Additionally, Outset Medical has enacted a one-for-fifteen reverse stock split, reducing its shares from approximately 265 million to about 17 million, effective March 20, 2025. This corporate action aims to reclassify the shares, with cash payments compensating for any fractional shares.

In another development, Outset Medical rectified a clerical error in its preferred stock documentation, amending the Certificate of Designation for its Series A Non-Voting Convertible Preferred Stock. This correction followed the conversion of 842,753 shares of Series A Preferred Stock into 210,688,250 shares of common stock, significantly increasing the number of common shares. Furthermore, the company has filed a Certificate of Correction to address the mathematical formula error in its preferred stock documentation.

Outset Medical’s recent actions, including the reverse stock split and correction of stock documentation, reflect ongoing corporate adjustments. These developments, coupled with the company’s financial performance, are part of its broader strategy to improve operational efficiency and financial management.

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