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On Thursday, Needham reduced its price target for CONMED Corporation (NYSE:CNMD) shares from $97.00 to $91.00, while still recommending a Buy rating for the medical technology company. The decision comes after CONMED reported fourth-quarter 2024 earnings, which included a revenue and EPS that surpassed the consensus estimates. According to InvestingPro analysis, CNMD currently shows "GREAT" overall financial health with a score of 3.37 out of 5, and appears undervalued based on its Fair Value assessment.
CONMED’s organic revenue growth saw an increase to 6.0% in the fourth quarter of 2024, up from 4.3% in the third quarter, despite ongoing supply chain challenges. The company also enjoyed a slight boost from an additional selling day in the quarter. Year-over-year, CONMED’s gross margin improved by 120 basis points, and its operating margin increased by 280 basis points. The company maintains strong profitability with a gross margin of 55.8% and has demonstrated consistent growth with a 5-year revenue CAGR of 8%.
However, the company’s management has provided revenue and EPS guidance for 2025 that falls below the consensus, attributing this to the persistent supply chain issues. These challenges are expected to continue affecting margins, even as the company takes steps to mitigate them, including engaging an external consultant.
Needham analysts anticipate that 2025 will be a year of transition for CONMED as it works to resolve its supply chain difficulties. Despite these hurdles, Needham believes that CONMED’s stock is currently undervalued, which supports the firm’s decision to maintain a Buy rating. The lowered price target reflects adjusted estimates based on the company’s latest financial outlook.
In other recent news, CONMED Corporation has been in the spotlight following a range of developments. The company reported better-than-expected fourth-quarter results for 2024, with sales reaching $346 million, primarily due to the strong performance of its AirSeal system. Earnings for the quarter were $1.34 per share, a 27% increase and notably higher than the projected $1.20.
However, JPMorgan analysts downgraded CONMED stock from Overweight to Neutral and reduced the price target to $70.00 due to concerns over the company’s lower than anticipated earnings guidance for 2025. The company forecasts earnings to be between $4.25 and $4.40 per share, significantly below the consensus estimate of $4.74.
Meanwhile, Stifel analysts maintained their Buy rating and $72.00 price target for CONMED. Their analysis, focusing on hospital insufflation products, indicated continued growth potential for the company’s Airseal product line, which accounts for approximately 18% of the company’s total sales.
In another development, CONMED announced a quarterly cash dividend of $0.20 per share, payable on January 3, 2025, to shareholders of record as of December 20, 2024. This dividend distribution is in line with CONMED’s financial strategy and reflects its commitment to shareholder value. These are some of the recent developments for CONMED Corporation.
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