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On Wednesday, Needham analysts increased the price target for AtriCure Inc. (NASDAQ: NASDAQ:ATRC) shares to $51, up from the previous $40, while maintaining a Buy rating on the stock. The adjustment follows a recent meeting with ATRC's management in San Francisco. The stock, currently trading at $39.63, is near its 52-week high of $39.67, having demonstrated strong momentum with a 66% gain over the past six months according to InvestingPro data.
The analysts' optimism is fueled by AtriCure's robust product cycle, which they believe will drive strong growth and more than offset the competitive pressures the company may face throughout 2025. AtriCure has issued initial guidance for the year, forecasting revenue growth between 11-13%. However, Needham analysts predict the actual growth could be more robust, potentially reaching mid- to high-teens, a figure more aligned with the company's 17.56% revenue growth. The company maintains a healthy gross profit margin of 74.79%, suggesting strong pricing power in its market segment.
The revised price target and sustained Buy rating reflect the analysts' confidence in AtriCure's future performance, particularly after the company's preannouncement and guidance provided on January 13, 2025. AtriCure's valuation remains appealing to Needham, currently standing at 3.6 times its projected 2025 sales. This valuation is considered attractive compared to its small and mid-cap growth peers, which average 4.1 times sales.
However, InvestingPro's Fair Value analysis suggests the stock may be slightly overvalued at current levels. Discover more insights and 8 additional ProTips for ATRC through the comprehensive Pro Research Report, available exclusively to subscribers.
Needham's stance is based on the anticipation that AtriCure's product offerings will continue to resonate well in the market, ensuring a steady revenue stream. The firm's updated estimates and price target are a testament to their belief in AtriCure's growth trajectory and market position.
In other recent news, AtriCure Inc. has been the focus of several positive analyst notes following robust financial results.
Needham retained its buy rating on AtriCure after the company reported a 17% year-over-year increase in fourth-quarter 2024 revenue, surpassing market expectations with a total of $124.3 million.
Piper Sandler analysts also expressed optimism for AtriCure's future, anticipating positive fiscal year outlooks. The company's U.S. revenue for the quarter is expected to reach $101.6 million, marking a 14% growth year-over-year, and international sales are also expected to show strong performance with an expected $22.7 million.
AtriCure attributed its revenue growth to strong sales of its cryoSPHERE products, followed by its open-heart AtriClip products, and its Encompass product. The company anticipates 2024 revenue to hit $465.3 million, slightly above the consensus estimate of $461 million. For 2025, AtriCure projects revenue to be in the range of approximately $517-527 million, representing an 11-13% growth.
AtriCure's recent developments include an Analyst & Investor Day to discuss its product portfolio and financial goals. The company has maintained a strong financial health profile and continues to show impressive revenue growth. These are recent developments for AtriCure, which has reported an 18% increase in year-over-year revenue for the third quarter of 2024, reaching $116 million, and raised its full-year revenue guidance to between $459 million and $462 million.
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