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On Friday, Cantor Fitzgerald analyst Ross Osborn increased the price target for Organogenesis Holdings (NASDAQ:ORGO) to $6.00 from the previous $5.00, while maintaining an Overweight rating on the company’s stock. Currently trading at $3.07, the stock shows significant upside potential according to InvestingPro data, with analyst targets ranging from $4.00 to $6.00. This adjustment follows Organogenesis’s announcement of a fourth-quarter earnings beat and the setting of an ambitious revenue guidance for 2025.
Organogenesis reported fourth-quarter total revenue of $126.7 million, which surpassed Cantor Fitzgerald’s projection of $114.4 million and the FactSet consensus of $107.2 million. This revenue figure marks a year-over-year growth of approximately 27%, fueled by a similar percentage increase in advanced wound care products, which reached $118.6 million. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 3.09, indicating solid liquidity. Get access to 8 more exclusive ProTips and comprehensive financial analysis with InvestingPro.
Looking ahead, Organogenesis has provided a revenue guidance for 2025 ranging from $480.0 million to $535.0 million, building on its current trailing twelve-month revenue of $455.04 million. This forecast is slightly higher than Cantor Fitzgerald’s estimate of $448.0 million and above the FactSet consensus of $481.2 million. The company anticipates flat to 11% year-over-year growth and expects the first half of 2025 to be challenging, with a significant improvement anticipated following the implementation of the skin substitute Local Coverage Determination (LCD) in April.
The analyst noted that this guidance assumes a turnaround in the latter part of the year and highlighted the competitive advantage Organogenesis is poised to gain in the wound care market. The company’s products, including Affinity, Apligraf, and Dermagraft, are among those that will continue to be eligible for Medicare reimbursement while approximately 180 other skin substitute products will no longer receive such support.
Osborn believes that Organogenesis is well-positioned to capture a larger share of the wound market, given the upcoming changes in Medicare reimbursement policies. This strategic market positioning is expected to benefit the company as it navigates through the forecasted challenging periods and capitalizes on the opportunities presented by the new LCD implementation.
In other recent news, Organogenesis Holdings Inc. reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share of $0.04, compared to a forecast of -$0.01. The company achieved a revenue of $126.7 million, exceeding the anticipated $109.61 million and marking a 27% year-over-year increase. Organogenesis has set a revenue guidance range of $480 million to $535 million for 2025, with expectations of challenging market conditions in the first half of the year. The company maintains a strong cash position with $136.2 million and no outstanding debt. In terms of analyst activity, no specific upgrades or downgrades were mentioned, but firms like Lake Street Capital Markets and Cantor Fitzgerald participated in the recent earnings call. Organogenesis is also focusing on its RENEW program, aiming for a BLA submission by the end of 2025. The company continues to navigate regulatory changes, which it views as an opportunity to enhance its market position.
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