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Investing.com - Piper Sandler downgraded Pulmonx Corp . (NASDAQ:LUNG) from Overweight to Neutral on Thursday, while significantly reducing its price target to $2.50 from $9.00 following the company’s second-quarter report. The stock, which has declined over 53% year-to-date, is currently trading at $3.15. According to InvestingPro analysis, the company appears undervalued at current levels.
The research firm cited six consecutive quarters of deceleration in Pulmonx’s high-margin U.S. business, creating concerns about management’s ability to meet even its updated full-year outlook. While the company maintains an impressive 73.47% gross margin and achieved 19.84% revenue growth in the last twelve months, Piper Sandler expressed doubts about the company’s potential to return to 15-20%+ top-line growth.
While acknowledging value in Pulmonx’s differentiated technology and high gross margin percentage in the endobronchial valve (EBV) market, the firm highlighted emerging headwinds affecting procedure volume and revenue growth.
Piper Sandler also raised concerns that Pulmonx’s path to EBITDA breakeven appears more distant than previously estimated, potentially extending the timeline for profitability.
The downgrade included warnings that Pulmonx might need to secure additional financing within the next one to two years, which could potentially be unfavorable to existing shareholders. However, the company currently maintains a strong liquidity position with a current ratio of 4.97 and holds more cash than debt on its balance sheet.
In other recent news, Pulmonx Corp reported its earnings for the second quarter of 2025, showing a net loss of $0.38 per share. This result was slightly better than analysts’ expectations, which had anticipated a loss of $0.40 per share. The company also reported revenue of $23.9 million, exceeding the forecasted $23.47 million. These financial results indicate a positive performance relative to projections. There were no updates regarding mergers or acquisitions. Analyst firms have not recently upgraded or downgraded Pulmonx’s stock. The company’s financial results are the main focus of recent developments. No additional company news was reported.
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