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On Friday, Needham analysts increased their price target on iRhythm Technologies (NASDAQ:IRTC) shares to $138 from $125, while reiterating a Buy rating on the stock. Currently trading at $112.67 with a market capitalization of $3.5 billion, InvestingPro data shows the company has delivered impressive returns, with a 59% gain over the past six months. The adjustment follows iRhythm’s fourth-quarter 2024 performance, which aligned with previous announcements, and the company’s confirmation of its revenue outlook for 2025.
iRhythm’s recent financial results have been bolstered by robust sales volumes in the United States for their Zio XT product, driven by the acceleration of a channel partner in the fourth quarter of 2024. The company maintains a healthy gross profit margin of 68.86% and has achieved revenue growth of 20.13% over the last twelve months. Additionally, the Zio AT product experienced a positive impact due to competitive disruptions in the market.
The company’s international endeavors are also contributing to its growth, with early-stage launches in select European countries showing promising expansion. Moreover, iRhythm has plans to enter the Japanese market in mid-2025, indicating a strategic push to increase its global presence. InvestingPro analysis reveals the company operates with strong liquidity, maintaining a current ratio of 5.82, which provides financial flexibility for international expansion. Discover more insights and 8 additional ProTips with an InvestingPro subscription.
The Needham analyst highlighted these developments in their commentary, stating, "IRTC’s 4Q24 revenue was in line with its preannouncement and management reiterated its 2025 revenue guidance. In the US, Zio XT volumes were strong and benefited from a channel partner ramping aggressively in 4Q24 while Zio AT saw a benefit from competitive disruption. Internationally, IRTC’s early launch in select countries in Europe continues to expand and management expects to launch in Japan in mid-2025. We reiterate our Buy rating and raise our price target to $138 (from $125)."
Investors and market watchers will likely keep a close eye on iRhythm’s progress in both domestic and international markets, as the company continues to execute its growth strategy and expand its product reach.
In other recent news, iRhythm Technologies reported a strong fourth-quarter performance with sales reaching $164.3 million, marking a 24% year-over-year increase and surpassing Wall Street expectations. This positive outcome included achieving its first quarter of adjusted earnings parity and a net income of $0.2 million, equating to one cent of earnings per share, contrary to the anticipated $0.25 loss per share. The company has reaffirmed its revenue guidance for 2025, projecting between $675 million and $685 million, with an adjusted EBITDA margin of 7-8%. Analyst firms such as JPMorgan, BTIG, and Citi have responded positively by raising their price targets for iRhythm, with JPMorgan setting it at $145, BTIG at $135, and Citi at $130, all maintaining favorable ratings.
Additionally, iRhythm is making efforts to address an FDA warning letter and observations, with plans to complete these by mid-2025. The company is also focusing on internal compliance initiatives and aims to stay on track with submission timelines for its Zio MCT product. In another development, iRhythm board member Mojdeh Poul will not seek re-election, as she transitions to her new role as CEO of Integra LifeSciences Holdings Corporation. Meanwhile, Oppenheimer has maintained an Outperform rating on iRhythm following an FDA recall of a competing product, potentially positioning iRhythm to capture more market share. These developments highlight iRhythm’s ongoing strategic initiatives and market positioning in the cardiac monitoring sector.
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