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On Friday, H.C. Wainwright analyst Oren Livnat increased the price target on Pacira Pharmaceuticals (NASDAQ:PCRX) shares to $48.00 from $39.00 while maintaining a Buy rating. Currently trading at $25.38, the stock has shown strong momentum with a 63% gain over the past six months. According to InvestingPro data, three analysts have recently revised their earnings estimates upward. The adjustment comes as the analyst believes the company’s 2025 revenue guidance is conservative, particularly in light of the recent positive developments for its drug Exparel.
Pacira’s initial revenue forecast for 2025 has been deemed cautious by the analyst, especially considering the tailwinds from the NOPAIN Act, which took effect on January 1, providing outpatient coverage at ASP+6%. With current revenue at $695 million and a healthy gross margin of 63%, InvestingPro analysis indicates the company maintains strong financial health with an overall score of 3.17 out of 4. This, combined with a new J-code and unexpectedly rapid commercial payer coverage following CMS, suggests to the analyst that the projected revenue of $725-765 million, which closely aligns with consensus, might be too low, representing only a 3-9% year-over-year growth.
Livnat has raised the 2025 revenue estimate for Pacira to $775 million, a 10.6% increase from the previous year, including $614 million from Exparel, up 11.8%. While management remains cautious about the speed of NOPAIN uptake, indicating a ramp in the second half of 2025, industry checks imply that hospitals will likely adopt Exparel more quickly for applicable procedures, given the financial incentives.
The analyst points out that approximately 18 million now-reimbursed outpatient procedures are available for Exparel, versus its current base of around 2 million. With these factors in mind, the modest 3-9% year-over-year growth does not seem to align with the existing momentum, which includes a 6% Exparel price increase and other separate tailwinds for Pacira’s products Zilretta and Iovera.
With revenue forecasts for Pacira increased by 4-10% between 2025 and 2028, and a new projection for 2029 at $1.2 billion, Livnat has raised the target price. The new target still assumes a conservative 11 times the firm’s 2026 earnings per share, which could be undervalued given the potential Exparel ramp and a projected greater than 20% earnings per share compound annual growth rate from there. Based on InvestingPro’s Fair Value analysis, PCRX appears undervalued, with strong free cash flow yield and moderate debt levels supporting this assessment. The analyst also noted that a generic de-risked discounted cash flow analysis would value the stock at $70 per share, with additional upside possible from pipeline value or Exparel outperformance. Discover 10+ additional exclusive ProTips and comprehensive financial analysis in the Pro Research Report, available with an InvestingPro subscription.
In other recent news, Pacira Pharmaceuticals Inc reported its fourth-quarter 2024 earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.91, exceeding the forecasted $0.79, and reported revenue of $187.3 million, which was above the anticipated $180.22 million. This strong performance was driven by robust sales of its key products, including EXPAREL, ZILRETTA, and ioverao. In addition, Pacira has set a revenue guidance for 2025, projecting between $725 million and $765 million. The company has also made strategic moves, such as acquiring the remaining stake in GQ Bio, which aligns with its strategy to expand its innovative pipeline. Analysts have noted the company’s consistent ability to surpass expectations, reflecting effective operational strategies. These developments come as Pacira aims to maintain growth through strategic initiatives and market expansion.
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