Street Calls of the Week
Investing.com - BTIG lowered its price target on OrthoPediatrics Corp. (NASDAQ:KIDS) to $23.00 from $39.00 on Friday, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock currently trades at $17.95, with analyst targets ranging from $18 to $42, suggesting significant potential upside despite recent challenges.
The price target reduction follows OrthoPediatrics’ preliminary third-quarter revenue announcement, which came in at $61.2 million, representing 12% year-over-year growth but falling short of BTIG and consensus estimates of $63.2 million and $63.6 million, respectively.
According to BTIG, the revenue miss was attributed to light international orders of instrument set sales in Central and South America, coupled with elongated sales cycles for 7D technology that did not close within the quarter. The firm noted that management reported strong Trauma & Deformity and Scoliosis sales, along with over 20% growth in OPSB sales.
Following the preliminary results, OrthoPediatrics reduced its fiscal year 2025 revenue guidance to $233.5 million - $234.5 million from the previous range of $237.0 million - $242.0 million, reflecting expected annual growth of 14.1% - 14.5%. The company also lowered its long-term growth expectations to 12%+ from the previous high-teens projection.
Despite these adjustments, OrthoPediatrics expects its profitability metrics to remain unchanged, with free cash flow break-even anticipated in fiscal year 2026. BTIG indicated that with shares already trading at approximately 1.4x next twelve months EV/Sales, there is limited downside at the current valuation.
In other recent news, OrthoPediatrics Corp. has reported preliminary third-quarter 2025 revenue of approximately $61.2 million, marking a 12% increase compared to the same period last year. Despite this growth, the revenue fell short of both Stifel’s estimate of $63.2 million and the consensus forecast of $63.6 million. The company has also adjusted its full-year 2025 revenue guidance to a range of $233.5 million to $234.5 million, down from the previous forecast of $237.0 million to $242.0 million, citing delayed capital sales and international order timing issues. This revised guidance still suggests a 14-15% growth over 2024 revenue. In response to these developments, several analyst firms have adjusted their price targets for OrthoPediatrics. Truist Securities lowered its price target to $18.00 while maintaining a Hold rating, reflecting reduced long-term growth expectations. Stifel also reduced its price target to $20.00 but maintained a Buy rating despite the sales miss. Additionally, Citizens adjusted its price target to $25.00, keeping a Market Outperform rating. These recent developments have garnered significant attention from investors and analysts alike.
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