Cantor Fitzgerald cuts Exagen stock target to $8, keeps Overweight rating

On Monday, Cantor Fitzgerald analyst Ross Osborn revised the price target for Exagen (NASDAQ:XGN), a diagnostics company, reducing it to $8.00 from the previous target of $9.00. Despite the adjustment in the price target, the firm maintained an Overweight rating on Exagen’s stock. According to InvestingPro data, the stock has shown remarkable resilience with a 70% return over the past year, despite recent market challenges. The company is currently trading at $3.23, with analyst targets ranging from $5 to $9.

Osborn’s reassessment of the price target comes in response to a more conservative forecast for the company’s 2025 revenue. The new outlook is influenced by lower-than-expected utilization of Exagen’s AVISE CTD test and a more cautious expectation for the pricing trajectory. The adjusted 12-month price target of $8 is based on a discounted cash flow (DCF) analysis, which incorporates several financial projections. InvestingPro data shows the company maintains strong liquidity with a current ratio of 4.05, though it’s worth noting that analysts don’t expect profitability this year.

The DCF model employed by Cantor Fitzgerald assumes a 10-year compound annual growth rate (CAGR) of 10.6% for Exagen’s revenue. This growth estimate is complemented by an assumption of a terminal growth rate of 2.5% after the 10-year forecast period, which the analyst regards as a reasonable projection.

Furthermore, Osborn anticipates that Exagen will experience significant margin expansion over the explicit forecast period detailed in the DCF model. The peak operating margins are estimated to reach approximately 12.1%. The weighted average cost of capital (WACC), an essential element in the DCF analysis, is assumed to be 11.2%.

Cantor Fitzgerald’s analysis reflects a careful consideration of Exagen’s financial outlook and market performance. The Overweight rating suggests that the firm continues to see the company’s stock as a potentially strong performer despite the moderated price target.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.