Cantor Fitzgerald maintains Avita Medical at Overweight, $19 target

On Monday, Avita Medical Ltd . (NASDAQ:RCEL) shares maintained their Overweight rating and $19.00 price target by analysts at Cantor Fitzgerald, representing significant upside potential from the current price of $6.11. According to InvestingPro data, five analysts have recently revised their earnings estimates upward for the upcoming period. The endorsement comes after a recent clinical publication that highlighted the effectiveness of Avita’s Cohealyx™, a collagen-based dermal matrix designed for wound treatment.

The study, released on June 5, showcased the product’s ability to significantly accelerate the process of wound bed vascularization and readiness for autografting. In the publication featured in the Journal of Surgery, Cohealyx™ demonstrated its capacity to prepare wounds for autografts within 5-10 days, a substantial improvement over the standard two to four weeks required by conventional dermal matrices.

This advancement is particularly noteworthy as it indicates a quicker pathway to skin grafting and functional recovery for patients. The two patient case series outlined in the study presented compelling evidence of Cohealyx’s effectiveness, with results showing not only faster wound preparation but also strong outcomes in skin graft adherence and patient recovery. The company’s strong gross margin of 85.47% and impressive revenue growth of 41.35% over the last twelve months reflect its operational efficiency in the medical device market.

Avita Medical (TASE:BLWV)’s focus on regenerative medicine and wound care is reflected in the development of Cohealyx™. The company’s innovative approach aims to improve healing times and outcomes for patients suffering from a variety of wounds. InvestingPro analysis reveals several additional insights about the company’s potential and challenges. Discover comprehensive analysis and 8 more exclusive ProTips with an InvestingPro subscription, including detailed financial health metrics and growth projections.

The positive findings from this clinical evaluation reinforce the potential of Cohealyx™ to become a significant tool in the treatment of wounds. The continued support from Cantor Fitzgerald underscores confidence in Avita Medical’s product and its impact on the market. With a healthy current ratio of 2.09 indicating strong short-term liquidity, and analyst targets ranging from $12.63 to $19.29, the company appears well-positioned despite recent market volatility. As the healthcare community seeks more efficient and effective treatment options, Avita Medical’s recent developments are poised to offer valuable solutions.

In other recent news, Avita Medical reported its first-quarter financial results for fiscal year 2025, revealing a net loss per share of $0.53, which did not meet analysts’ expectations of a $0.32 loss. The company’s revenue also missed forecasts, coming in at $18.5 million against the anticipated $20.75 million. Despite these misses, Avita Medical’s revenue showed a 67% year-over-year increase, attributed to deeper market penetration and new customer acquisitions. The company has maintained its full-year commercial revenue guidance, projecting between $100 million and $106 million, indicating a potential growth of 55% to 65%.

Cantor Fitzgerald reiterated its Overweight rating on Avita Medical, maintaining a price target of $19.00 per share. The firm expressed optimism about Avita Medical’s potential, citing the launch of new products such as RECELL GO and Co Helix as positive factors for future growth. Avita Medical aims to achieve GAAP profitability by the fourth quarter of 2025 and generate free cash flow in the second half of the year. The company is also optimistic about its expanded product lineup, which includes RECELL GO Mini and Co Helix, expecting these to drive revenue growth throughout 2025.

Additionally, Avita Medical has implemented operational efficiencies, including a restructuring of its sales force, to better align with its expanded product offerings. The company has taken steps to reduce operating expenses by approximately $2.5 million per quarter. Despite the recent earnings miss, Avita Medical remains confident in its strategic positioning and growth potential in the acute wound care market.

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