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On Friday, shares of Avita Medical Ltd . (NASDAQ:RCEL) experienced a significant decline, dropping 22% in early trading, pushing the stock near its 52-week low of $6.90. Despite the downturn, Cantor Fitzgerald has reaffirmed its confidence in the company. Analysts at Cantor reiterated an Overweight rating and a $19.00 price target on Avita Medical (TASE:BLWV), following the release of its first-quarter results for fiscal year 2025. According to InvestingPro analysis, the company is currently undervalued, though it faces challenges with cash burn.
Avita Medical reported commercial revenue of $18.5 million, which fell short of Cantor Fitzgerald’s projection of $20.1 million and the FactSet consensus of $20.9 million. Nevertheless, this figure represents a year-over-year growth of approximately 67%, continuing the company’s strong growth trajectory. The company maintains an impressive gross margin of 85.47% and has demonstrated consistent revenue growth, with a 41.35% increase over the last twelve months. The growth was attributed to increased penetration within existing customer accounts, as well as the acquisition of new accounts for the treatment of full-thickness skin defects.
Despite the lower-than-expected commercial revenue, Avita Medical has maintained its full-year commercial revenue guidance for FY25, forecasting a range of $100 million to $106 million. This guidance suggests a robust year-over-year growth of about 55% to 65%. Prior to the earnings call, Cantor Fitzgerald’s estimate stood at $103.4 million, closely aligned with the FactSet consensus of $101.8 million.
Cantor Fitzgerald’s analysts expressed optimism about Avita Medical’s prospects, citing several factors that could contribute to the company’s performance exceeding expectations in the current fiscal year. The introduction of RECELL GO, the rollout of the Mini device, and expected material growth in the second half of the year from new products like PermeaDerm and Cohealyx, are all seen as positive drivers for the company’s future results.
Despite the stock’s current weakness, Cantor Fitzgerald’s analysts recommend purchasing shares, believing that Avita Medical is well-positioned to surpass its targets in the upcoming months. This aligns with the broader analyst consensus tracked by InvestingPro, which maintains a strongly bullish outlook on the stock. For deeper insights into Avita Medical’s financial health, growth prospects, and detailed analyst forecasts, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Avita Medical announced its Q1 2025 financial results, reporting a net loss per share of $0.53, which was below analysts’ expectations of a $0.32 loss. The company’s revenue also fell short of forecasts, coming in at $18.5 million compared to the anticipated $20.75 million. Despite missing estimates, Avita Medical achieved a 67% year-over-year revenue increase. The company is targeting GAAP profitability by Q4 2025 and aims to generate free cash flow in the second half of the year. Avita Medical has launched new products, including ReCell Go Mini and Co Helix, with positive early feedback from the market. The company expects these products to contribute significantly to revenue growth throughout 2025. Additionally, Avita Medical has restructured its sales model to focus more on selling rather than service, aiming to enhance its commercial reach. The company maintains full-year revenue guidance of $100-106 million, projecting growth of 55-65% compared to 2024.
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