On Monday, H.C. Wainwright exhibited confidence in Fortress Biotech (NASDAQ:FBIO) by increasing the price target on the company's shares to $26.00, up from the previous $24.00, while maintaining a Buy rating on the stock. The firm's decision came after Fortress Biotech announced its financial results for the third quarter of 2024.
Fortress Biotech reported a GAAP EPS of ($0.76) for the third quarter, which was notably better than the analyst's estimate of ($1.49). The company's revenue for the quarter was reported at $14.63 million, which, despite falling short of the estimated $16.28 million, did not deter the firm's positive outlook.
The revenue for the quarter was primarily based on the performance of Journey Medical (TASE:PMCN) (DERM; not rated). The quarter-end cash position for Fortress Biotech was strong, with a reported $58.9 million in reserves.
The analyst from H.C. Wainwright reiterated the Buy rating for Fortress Biotech and justified the increase in the price target from $24 to $26. The adjustment reflects the firm's belief in the company's potential for growth despite the slight revenue shortfall in the third quarter.
Investors responded positively to the news, with shares of Fortress Biotech likely to be influenced by the updated price target and continued endorsement from the analyst firm. The company's better-than-expected earnings per share and solid cash position contribute to the optimistic outlook for its stock performance.
In other recent news, Mustang Bio (NASDAQ:MBIO) has secured an extension from the Nasdaq Hearings Panel to meet the exchange's continued listing requirements. The company also received FDA Orphan Drug Status for its glioma treatment, MB-108, and has ongoing clinical trials for its potential treatments for malignant gliomas.
Mustang Bio also generated around $4 million from warrant exercises and announced a stock offering and private placement expected to yield approximately $2.5 million.
Fortress Biotech, Mustang Bio's parent company, has secured FDA approval for its rosacea treatment, Emrosi™, developed in partnership with Dr. Reddy’s Laboratories. The company has also secured approximately $8 million from stock sales and private placements and entered into a $50 million loan agreement with Oaktree Capital Management. The company reported a second-quarter revenue of $14.9 million.
In response to these developments, analysts from Roth/MKM have raised Fortress Biotech's price target from $10.00 to $13.00, maintaining a Buy rating.
InvestingPro Insights
While H.C. Wainwright has shown confidence in Fortress Biotech (NASDAQ:FBIO) by raising its price target, it's crucial to consider additional financial metrics and insights to gain a comprehensive view of the company's current position.
According to InvestingPro data, Fortress Biotech's market capitalization stands at $39.42 million, reflecting its small-cap status. The company has demonstrated strong revenue growth, with a 31.51% increase over the last twelve months as of Q3 2024, reaching $81.5 million. This growth aligns with the positive outlook expressed by H.C. Wainwright.
However, investors should be aware of some challenges. InvestingPro Tips highlight that Fortress Biotech is quickly burning through cash and is not profitable over the last twelve months. The company's operating income margin stands at -115.07%, indicating significant operational costs relative to revenue.
The stock's recent performance has been concerning, with InvestingPro data showing a 21.86% decline over the past month and a 52.49% drop year-to-date. This downtrend is reflected in the stock trading near its 52-week low, as noted by one of the InvestingPro Tips.
Despite these challenges, the company's price-to-book ratio of 1.86 suggests that the stock might be undervalued relative to its book value. Additionally, analysts have set a fair value target of $13 per share, significantly higher than the current trading price.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips for Fortress Biotech, providing a deeper understanding of the company's financial health and market position.
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