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On Tuesday, Piper Sandler maintained a Neutral rating on TELA Bio, Inc. (NASDAQ:TELA) with a steady price target of $2.00. The firm’s analysts highlighted TELA Bio’s first-quarter performance, which surpassed top-line estimates but fell short in terms of operating loss. According to InvestingPro data, TELA has shown revenue growth of 12.78% over the last twelve months, though the stock has declined over 80% in the past year. Despite a stronger-than-anticipated quarter, analysts noted that the company faces a significant increase in activity in the latter half of the year to meet its revenue guidance.
TELA Bio’s revenue expectations for the full year remain unchanged, and analysts now see these targets as more attainable than they did previously. The company’s refined sales force has begun to demonstrate some improvements in productivity, and the anticipated launch of a new product later in the year is expected to bolster market share in its category. The company maintains a healthy gross profit margin of 67.46%, though InvestingPro analysis indicates it’s currently burning through cash rapidly. For deeper insights into TELA’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Nevertheless, Piper Sandler expressed concern over TELA Bio’s higher-than-expected spending in the first quarter, particularly in sales, general, and administrative expenses (SG&A). The analysts believe that this increased expenditure, coupled with the potential need for additional financing, may continue to put pressure on TELA Bio’s stock performance.
The company’s strategy to enhance sales force efficiency and introduce new products is a move towards capturing a larger segment of the market. However, the financial burden of these initiatives and the looming possibility of further fundraising efforts are factors that investors will likely monitor closely in the coming months.
In other recent news, Tela Bio reported its Q1 2025 financial results, revealing a revenue of $18.5 million, which fell short of the expected $21.05 million. Despite this revenue miss, the company experienced a 12% year-over-year increase in revenue, driven by strong demand for its OviTex product lines, which saw a 15% increase in revenue. The company’s stock rose by 9.04% in aftermarket trading, reflecting positive investor sentiment towards Tela Bio’s strategic direction and future growth potential. Tela Bio anticipates full-year 2025 revenue growth of 23-27%, projecting total revenues between $85 million and $88 million. The company faces potential challenges, such as tariffs on New Zealand-manufactured products, which could impact gross margins by 50-100 basis points. Analysts from Lake Street Capital Markets have shown interest in the company’s growth trajectory and have discussed the impact of tariffs on Tela Bio’s financials. The company’s net loss for Q1 2025 was reported at $11.3 million, compared to $5.7 million in the prior year, highlighting ongoing financial challenges. Despite these hurdles, Tela Bio remains optimistic about its innovative product offerings and market position.
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