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On Wednesday, Needham analysts adjusted their stance on AtriCure Inc. (NASDAQ:ATRC), reducing the price target to $44.00 from the previous $51.00, while still holding a Buy rating for the company’s shares. According to InvestingPro data, AtriCure maintains a "GOOD" overall financial health score, with the stock currently trading at $34.65. The revision followed AtriCure’s first-quarter earnings report for 2025, which surpassed consensus estimates in terms of revenue, EBITDA, and EPS.
AtriCure has confirmed its revenue outlook for the year and increased its adjusted EBITDA and EPS forecasts. The company experienced a slight deceleration in revenue growth, reporting a 14% increase in the first quarter of 2025, down from 17% in the final quarter of 2024. With trailing twelve-month revenue of $480 million and a robust gross margin of 74.76%, the company maintains strong operational efficiency despite the slowdown. This deceleration was attributed to a decline in sales from its Open-Heart Ablation, Minimally Invasive Ablation, and Pain Management segments, somewhat counterbalanced by stronger performance in Appendage Management.
Year-over-year analysis reveals that AtriCure’s gross margin improved by 30 basis points, while operating margin saw a significant rise of 520 basis points. Additionally, the adjusted EBITDA margin increased by 450 basis points. The Needham analyst expressed a view that AtriCure’s revenue growth guidance, remaining in the low teens, might be on the conservative side, suggesting there could be potential for mid-teens growth or better.
The reduction in AtriCure’s price target was attributed to a contraction in peer multiples, which has affected valuation perspectives. Despite this adjustment, the analyst’s maintained Buy rating indicates a continued positive outlook on the stock’s potential performance.
In other recent news, AtriCure Inc. reported its first-quarter 2025 earnings, showing a stronger-than-expected performance with an adjusted loss per share of $0.14, surpassing the forecasted loss of $0.22. The company’s revenue reached $123.6 million, slightly above the anticipated $123.08 million, marking a 13.6% year-over-year increase. AtriCure’s Pain Management business experienced a notable 39% growth, driven by the rapid adoption of new product launches. Additionally, the U.S. Open AtriClip sales saw a 23% increase compared to the previous year. JMP Securities analyst Daniel Stauder reiterated a Market Outperform rating for AtriCure, maintaining a $60.00 price target, highlighting the company’s progress towards sustainable revenue growth. AtriCure anticipates introducing additional products in 2025, including CryoXT for Pain Management and AtriClip PRO-Mini for Appendage Management, which are expected to contribute to its growth trajectory. The company has also raised its full-year adjusted EBITDA guidance to $44-$46 million, projecting positive cash flow for the remainder of the year.
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