On Thursday, Jefferies began coverage of Procept BioRobotics Corp (NASDAQ: PRCT) stock, assigning a Hold rating to the company's stock along with a price target of $95.00.
Procept BioRobotics has been making strides in the urology market with its minimally invasive, robotic surgical solutions, specifically through the uptake of its Aquabeam robotic system and Aquablation procedure.
These innovations have enabled the company to capture market share from traditional treatments such as Transurethral Resection of the Prostate (TURP) and simple prostatectomy (SP).
The firm acknowledges the potential of Procept BioRobotics' newly approved Hydros system to encourage surgeon adoption and initiate a replacement cycle for older systems.
The Hydros system, which received clearance in mid-August, is designed to reduce procedure times by approximately 10 to 20 minutes through the use of AI-based treatment planning and a streamlined workflow.
The system's ease of use and efficiency improvements are expected to appeal to surgeons, potentially leading to increased adoption and upgrades of systems that are more than two years old.
Procept BioRobotics' stock has seen significant growth, with a 120% increase and a 42% rise since the Hydros system's clearance. Despite this performance, Jefferies sees limited upside to the share price, which is currently trading at approximately 16 times the 2025 consensus sales estimates.
The analyst's checks indicate that the market may begin to see a cycle of upgrades starting in 2025, with Procept BioRobotics highlighting its installed base of 167 U.S. systems at the end of 2022 as an opportunity for replacements.
Jefferies' base case scenario includes the placement of 210 Hydros systems in the U.S. in 2025, which also accounts for 15 upgrades from the first-generation Aquabeam systems to the Hydros model.
InvestingPro Insights
Procept BioRobotics Corp (NASDAQ: PRCT) has demonstrated impressive market performance, aligning with the article's discussion of its significant stock growth. InvestingPro data reveals a remarkable 176.28% price total return over the past year, with a 120.11% return year-to-date. This strong performance is further emphasized by the stock trading at 88.86% of its 52-week high, indicating sustained investor confidence.
Despite the company's robust revenue growth of 71.71% over the last twelve months, InvestingPro Tips caution that Procept BioRobotics is not currently profitable, with analysts not anticipating profitability this year. This aligns with the article's focus on the company's growth potential rather than immediate profitability.
The market's optimism about Procept BioRobotics' future is reflected in its high valuation multiples. With a Price / Book ratio of 20.69 and a market cap of $4.99 billion, the company is trading at a premium, which corresponds to Jefferies' observation of limited upside at current price levels.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Procept BioRobotics, providing a deeper understanding of the company's financial health and market position.
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