Canaccord maintains Buy rating on Pulmonx stock with $16 target

Published 21/03/2025, 12:38
Canaccord maintains Buy rating on Pulmonx stock with $16 target

On Friday, Canaccord Genuity sustained its optimistic stance on Pulmonx Corp . (NASDAQ:LUNG), maintaining a Buy rating and a price target of $16.00. Currently trading at $7.70, the stock has gained over 13% year-to-date, according to InvestingPro data. Canaccord’s endorsement follows recent virtual meetings and a fireside chat with the respiratory medical device company’s leadership, including President & CEO Steve Williamson and CFO Mehul Joshi.

During the discussions, which took place on Tuesday, investors concentrated on Pulmonx’s robust performance in the fourth quarter and its outlook for the year 2025. The company’s executives, who have each held their positions for approximately one year, are applying their prior commercial leadership experience to spearhead initiatives aimed at realizing the company’s ambition of surpassing a 20% long-term growth target. InvestingPro data shows the company achieved 22% revenue growth in the last twelve months, with strong financial health indicators including a current ratio of 5.58.

These new initiatives, which are currently being rolled out, are expected to start positively impacting the U.S. market in the latter half of 2025. The management team expressed confidence in reaching cash flow profitability with the existing cash reserves while projecting a reduction in cash burn by adhering to strict operating expense controls.

The company’s valuation was highlighted as attractive, with Pulmonx trading at 2.8 times its estimated 2025 enterprise value to sales ratio. This is notably lower than the median of the medical technology peer group, which stands at 5.2 times. Based on these financial prospects and strategic plans, Canaccord reaffirmed its Buy recommendation and the $16 price target for Pulmonx stock. InvestingPro analysis indicates the stock is currently fairly valued, with analysts setting targets ranging from $8 to $17. Get access to detailed valuation metrics and 6 additional ProTips with an InvestingPro subscription.

In other recent news, Pulmonx Corp. reported a strong fourth-quarter performance for 2024, with revenue reaching $23.8 million, marking a 23% increase year-over-year. This growth was driven by a 42% surge in international revenue and a 16% rise in U.S. revenue. Pulmonx exceeded earnings expectations with an EPS of -$0.33, surpassing the forecasted -$0.4475. Citi analysts responded to these results by raising the company’s stock price target to $8.00, though they maintained a Neutral rating. Additionally, Boral (OTC:BOALY) Capital initiated coverage on Pulmonx with a Buy rating and set a $17 price target, citing the company’s potential for significant market growth, especially with its Zephyr Endobronchial Valve. Pulmonx’s management has projected 2025 revenue between $96 million and $98 million, representing a growth rate of 16%-18%. The company continues to focus on expanding physician adoption and international presence, aiming to establish its Zephyr valve as a standard treatment for COPD.

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