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On Wednesday, Truist Securities revised its price target for RadNet shares, a leading provider of diagnostic imaging services listed on (NASDAQ:RDNT). Analyst David MacDonald adjusted the target to $88.00, down from the previous $94.00, but maintained a Buy rating on the stock.
Currently trading at $60.19 with a market capitalization of $4.46 billion, RadNet's stock has demonstrated strong momentum with a 57.77% return over the past year. According to InvestingPro analysis, the stock appears overvalued at current levels.
The adjustment follows recent management meetings which reinforced the analyst's positive outlook on the company's prospects. MacDonald highlighted the robust demand trends at RadNet's core imaging centers, supported by impressive revenue growth of 12.2% in the last twelve months. He also pointed to the significant potential of the company's Digital Health segment, which is expected to gain momentum from 2025 into 2026 and beyond.
According to MacDonald, the deployment of RadNet's DeepHealth Operating System (OS) is anticipated to attract increased investment throughout 2025, which should, in turn, bolster growth and broaden the long-term growth prospects for the company. The analyst also sees opportunities for RadNet to leverage its operations and cross-sell its services over time.
The company's strong financial flexibility was noted as a key factor that would support ongoing investments in growth and the possibility of mergers and acquisitions. While MacDonald's estimates have been slightly trimmed to account for a higher assumed investment in the Digital Health segment, his reiteration of a Buy rating underscores confidence in RadNet's continued performance.
The revised price target of $88 reflects the balance between the near-term investment expectations and the long-term growth trajectory that Truist Securities foresees for RadNet. The broader analyst community maintains a highly bullish stance, with price targets ranging from $80 to $100.
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In other recent news, RadNet reported robust third-quarter results, with revenue growth of 14.7% to $461.1 million and an adjusted EBITDA increase of 27.2%, reaching $73.7 million. The company's net income, however, declined to $3.2 million due to one-time expenses. Raymond (NSE:RYMD) James revised RadNet's fourth-quarter 2024 EBITDA estimate down by approximately $5 million to $72 million, while Jefferies adjusted their price target for the company's shares to $80.
In the wake of these developments, RadNet is actively pursuing mergers and acquisitions and planning to expand its digital segment. The company is also preparing for significant investment in 2025, with Raymond James projecting a recovery year in 2026 as cost savings from the DeepHealth operating system start to materialize.
In terms of analyst projections, for the fiscal year 2024, Raymond James estimates RadNet's revenue at $1.800 billion with an adjusted EBITDA of $276 million. For 2025, they anticipate revenue of $1.958 billion and an adjusted EBITDA of $298 million. The 2026 projections remain unchanged, with revenue estimated at $2.088 billion and adjusted EBITDA at $328 million.
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