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On Friday, Cantor Fitzgerald analysts maintained their Overweight rating and $19.00 price target for Avita Medical Ltd . (NASDAQ:RCEL) stock, despite the shares being down nearly 50% over the past year. According to InvestingPro analysis, the company appears undervalued at current levels, with analyst targets ranging from $11.07 to $25.39. The firm's analysis followed Avita's recent commercial revenue report, which showed a year-over-year increase of approximately 29%, totaling $18.4 million. This figure fell short of Cantor Fitzgerald's pre-announcement estimate of $23.9 million and the FactSet consensus of $23.0 million, attributed to slower-than-expected purchasing by hospitals in December.
Despite the lower-than-anticipated revenue, Avita reiterated its fiscal year 2025 commercial revenue forecast, projecting it to be between $100 million and $106 million. This guidance aligns closely with Cantor Fitzgerald's prediction of $103.7 million and is slightly below the FactSet consensus of $105.7 million. The forecasted revenue range represents a significant growth of about 55-65% year-over-year, building on the company's impressive 32.24% revenue growth over the last twelve months. InvestingPro data shows the company maintains a strong gross profit margin of 85.66%, though it currently operates at a loss.
The analysts expressed optimism about Avita's outlook, citing several factors that could contribute to the company's performance. The introduction of RECELL GO, the rollout of a new product called Mini, and anticipated material growth in the second half of the year from other offerings like PermeaDerm and Cohealy, are expected to bolster the company's revenue.
Avita Medical (TASE:PMCN)'s strategic focus includes the continued roll-out and adoption of its skin regeneration products. The company's RECELL System is an innovative treatment that enables healthcare professionals to produce a suspension of Spray-On Skin Cells using a small sample of the patient's skin. This suspension can then be applied to treat acute thermal burns.
The Cantor Fitzgerald report underscores a positive outlook for Avita Medical, anticipating that the company is well-positioned to exceed expectations in the coming year, with a robust product pipeline poised to drive growth in the latter half of the year. For deeper insights into Avita Medical's growth prospects and financial health, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company's valuation metrics, growth trajectory, and market position among 1,400+ top US stocks.
In other recent news, Avita Medical has been under the spotlight due to key developments. A recent revenue shortfall led Lake Street Capital Markets to adjust its price target for Avita Medical from $20 to $14, while maintaining a Buy rating. Despite the disappointment in fourth quarter revenue figures, Lake Street sees potential in Avita Medical's newly FDA-approved products, RECELL GO mini and Cohealyx, expected to drive revenue growth in 2025.
Concurrently, D. Boral (OTC:BOALY) Capital initiated coverage on Avita Medical with a Buy rating and a $25.00 price target, citing the company's strong growth trajectory underpinned by its innovative tissue regeneration technology, Recell. D. Boral Capital's confidence in Avita Medical's future is largely based on its market penetration in the United States, with additional growth potential noted in Europe, the UK, Australia, Japan, and China.
Recently, Avita Medical received FDA approval for its RECELL GO Mini, a device aimed at treating smaller wounds. Cantor Fitzgerald reaffirmed its Overweight rating and $21.00 price target for Avita Medical following this development. The firm expects the RECELL GO Mini to enhance Avita Medical's offerings in trauma and burn centers, further solidifying its presence in the wound care market. These recent developments highlight Avita Medical's ongoing efforts to expand its product portfolio and market reach.
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