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On Friday, Citi analyst Joanna Wuensch increased the price target on iRhythm Technologies (NASDAQ:IRTC) shares to $130 from the previous target of $100, while maintaining a Buy rating on the stock. The upgrade comes in response to the company’s strong performance in the fourth quarter of 2024 and its positive outlook for the future. According to InvestingPro data, the medical technology company, currently valued at $3.5 billion, is trading above its Fair Value, with the stock showing impressive momentum, gaining nearly 60% over the past six months.
iRhythm Technologies reported a 24% year-over-year increase in revenue for the fourth quarter of 2024, with figures reaching $164.3 million, which exceeded the Street’s expectations of $158.1 million. The company also demonstrated effective expense management, as reflected in the expansion of its gross margins to 70.0% from 66.0% in the prior year. This resulted in an adjusted EBITDA of $19.3 million, surpassing the consensus estimate of $15.5 million. InvestingPro analysis shows the company maintains strong financial flexibility with a current ratio of 5.82, indicating robust liquid assets compared to short-term obligations.
Wuensch highlighted the company’s robust performance across various channels and products, indicating that the business is operating effectively. Management’s guidance for 2025 estimates revenue to be between $675 million and $685 million, which is in line with consensus projections of $679.4 million. The projected adjusted EBITDA margin is set at 7-8%, compared to the current 7.8%.
The analyst expressed confidence in iRhythm’s strategic partnerships with primary care providers and value-based care networks, as well as its integration with electronic health records. These initiatives are expected to contribute to the company’s ability to meet or exceed its guidance as they are implemented more fully.
In summary, Wuensch’s commentary on iRhythm Technologies’ recent performance and future prospects supports the decision to reiterate a Buy rating and raise the price target on the company’s stock, signaling a positive outlook for the company’s continued growth and financial health.
In other recent news, iRhythm Technologies reported that board member Mojdeh Poul will not seek re-election at the next annual stockholders meeting, as she transitions to her new role as President and CEO of Integra LifeSciences Holdings Corporation. Meanwhile, the company has received positive attention from analysts, with Oppenheimer reiterating an Outperform rating and increasing the price target to $120. This follows a Class I recall by the FDA of a competing product from Philips, potentially opening market opportunities for iRhythm. Additionally, Needham analysts have upgraded their price target for iRhythm to $112, citing stronger-than-expected revenue guidance for 2024 and 2025. iRhythm anticipates fourth-quarter revenue for 2024 to exceed $160 million, surpassing the consensus estimate. The company also projects 2025 revenue in the range of $675-685 million, above the $680 million consensus. Analysts at Needham and Oppenheimer have expressed confidence in iRhythm’s growth trajectory, despite ongoing regulatory challenges. The integration of iRhythm’s Zio product with Epic Aura and its growing use in primary care are seen as key factors driving future growth.
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