Canaccord raises AxoGen stock price target to $22 from $18

On Monday, Canaccord Genuity adjusted their valuation of AxoGen, Inc. (NASDAQ: NASDAQ:AXGN), increasing the price target to $22.00 from the previous $18.00. The firm reaffirmed its Buy rating on the company’s shares. The decision comes after AxoGen’s recent preannouncement of Q4 2024 results, which surpassed expectations. According to InvestingPro data, the company has demonstrated impressive momentum, with a 124.8% price return over the past six months and is currently trading near its 52-week high of $19.06.

The rationale behind the price target uplift is twofold: AxoGen’s stock has shown significant appreciation, and Canaccord Genuity’s revised estimates following the strong fourth-quarter performance. The analysts believe that AxoGen deserves a higher valuation compared to its peers, citing a 30% premium over the average of the small-cap medical technology companies. The company’s strong performance is supported by an 18.79% revenue growth and a healthy gross profit margin of 78.75%.

The new $22.00 price target is derived from applying a 4.3x enterprise value to sales (EV/Sales) multiple to the forecasted 2026 revenue of $239.1 million. This multiple represents a substantial premium to the median of the comparable group, excluding the highest and lowest valuations, signaling confidence in AxoGen’s growth prospects and financial health. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with a current market capitalization of $801.39 million.

AxoGen’s positive preannouncement for Q4 2024 has clearly made an impression on Canaccord Genuity, prompting them to reassess the company’s future revenue potential. The firm’s analysts have taken a bullish stance on the stock, suggesting that they see a strong trajectory for AxoGen moving forward.

Investors will likely watch AxoGen’s progress closely, as the company continues to perform and potentially exceed market expectations. The raised price target from Canaccord Genuity serves as a testament to AxoGen’s recent successes and the anticipated continued growth in the coming years.

In other recent news, Axogen, a global player in peripheral nerve repair, reported a significant rise in revenue and adjusted EBITDA during its Q3 2024 earnings call. The company also announced the submission of the Biologic License Application (BLA) for their Avance Nerve Graft. Axogen’s Q3 revenue reached $48.6 million, marking an 18% increase year-over-year, while adjusted EBITDA rose to $6.5 million from $2.4 million in Q3 2023.

The company is maintaining its revenue guidance for 2024 and anticipates achieving a gross margin at the high end of the projected range. Axogen ended Q3 with $30.5 million in cash and equivalents. The FDA has accepted the BLA for priority review, with the review process expected to conclude by September 5, 2025.

Axogen’s focus is on submitting the BLA for Avance Nerve Graft, meeting revenue guidance, and developing a new strategic operating plan. The company anticipates at least 12 years of market exclusivity for Avance as a reference product for biosimilars. Despite a slight decrease in gross margin and an increase in operating expenses, the company’s financial health appears robust.

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