Street Calls of the Week
On Monday, JMP Securities maintained its optimistic stance on AtriCure Inc. (NASDAQ:ATRC), reiterating a Market Outperform rating and a $60.00 price target. The firm’s analysts highlighted their anticipation for the medical device company’s growth potential, particularly in 2025, which is expected to significantly contribute to the company’s performance beyond its initial full-year guidance. The guidance, which projected an 11-13% year-over-year increase, was set in mid-January.
AtriCure’s stock has seen a notable ascent, trading approximately 35% higher since the beginning of the year, with InvestingPro data showing an impressive 96% return over the past six months. The stock is currently trading near its 52-week high of $43.11, reflecting strong market confidence. Despite this surge, shares are currently valued at around 3 times enterprise value to revenue. JMP Securities analysts believe this valuation does not fully account for the company’s prospective gains. They point to "multiple shots on goal" that AtriCure is lining up for 2025 and 2026, which could underpin the company’s double-digit revenue growth trajectory. InvestingPro analysis indicates the company maintains a healthy financial position with a strong current ratio of 3.62 and operates with a moderate debt level.
The commentary from JMP Securities suggests a strong belief in AtriCure’s near-term growth drivers. The firm is particularly keen on receiving more detailed commentary from the company concerning these drivers. The analysts’ current view is that the expected growth in 2025 could be significantly higher than what the initial guidance suggests, hinting at a potentially undervalued stock at its current trading price. For deeper insights into AtriCure’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which offer expert analysis on over 1,400 US stocks.
AtriCure specializes in developing, manufacturing, and selling surgical devices designed to improve the outcomes of patients with atrial fibrillation and related conditions. The company’s growth prospects are tied to its innovative product pipeline and the successful execution of its strategic initiatives.
The reaffirmation of the Market Outperform rating and the $60.00 price target by JMP Securities comes as a strong signal to the market about the firm’s confidence in AtriCure’s future performance. The analysts’ commentary underscores the potential for significant growth that may not yet be reflected in the company’s current market valuation.
In other recent news, AtriCure has been in the spotlight due to its impressive growth projections and strong valuation. Needham analysts recently reiterated their Buy rating on AtriCure shares and increased the price target to $51, up from the previous $40. This adjustment was based on AtriCure’s robust product cycle, which is expected to drive strong growth, potentially reaching mid- to high-teens, despite competitive pressures.
In the fourth quarter of 2024, AtriCure’s revenue surpassed market expectations, with a year-over-year increase of 17% to $124.3 million, exceeding the consensus estimate of $119.8 million. The company attributed this growth to strong sales of its cryoSPHERE products, AtriClip products, and Encompass product.
Looking ahead, AtriCure anticipates 2024 revenue to hit $465.3 million, slightly above the consensus estimate of $461 million. The company has also issued initial guidance for 2025, forecasting revenue growth between 11-13%, with an expected adjusted EBITDA of $40 million to $44 million.
Meanwhile, Piper Sandler analysts have expressed optimism for several healthcare companies, including AtriCure, anticipating positive fiscal year outlooks. These recent developments highlight AtriCure’s promising growth trajectory and market position.
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