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On Tuesday, Stifel analysts adjusted their outlook on Livanova (NASDAQ:LIVN) stock, reducing the price target to $60 from the previous $72 while maintaining a Buy rating. The stock, which has declined nearly 12% in the past week and is trading close to its 52-week low, appears undervalued according to InvestingPro analysis. The analysts noted that LivaNova ended 2024 with a mid-single-digit revenue growth of 6.7%. However, the company’s fourth-quarter revenues of $321.8 million fell short of the consensus estimate of approximately $324 million, marking its first revenue miss since the first quarter of 2020, which was impacted by COVID-19.
The company has provided initial revenue guidance for 2025, anticipating continued mid-single-digit growth between 6% and 7%. Stifel analysts found the 2025 outlook to be within expectations, neither particularly positive nor negative, as they had projected around 5% growth for the year. This outlook follows LivaNova’s strong financial health metrics, with InvestingPro data showing a healthy current ratio of 3.37 and last twelve months revenue growth of 11%. They believe the guidance reflects the dynamics set for 2025, including challenges in the Epilepsy business due to end-of-service headwinds and tough comparisons in the heart-lung machine replacement cycle.
Stifel also pointed out that in both 2023 and 2024, LivaNova’s revenue growth guidance began with mid-single-digit predictions and concluded with double-digit growth. This pattern suggests that the initial guidance for 2025 might be conservative and could be subject to upward revisions as the year progresses.
Looking ahead, three significant potential catalysts for LivaNova in 2025 could shift the narrative for the company. These include the final supreme court ruling on the SNIA litigation expected in the first half of 2025, the OSPREY trial data on obstructive sleep apnea also anticipated in the first half of the year, and the final CMS data submission for the RECOVER depression trial. For deeper insights into these catalysts and their potential impact, InvestingPro subscribers can access comprehensive analysis and additional ProTips in the detailed Pro Research Report, which transforms complex Wall Street data into actionable intelligence.
Stifel’s assessment of LivaNova’s stock reflects a cautious optimism, acknowledging the challenges while also highlighting upcoming events that could positively influence the company’s performance.
In other recent news, LivaNova PLC reported its fourth-quarter 2024 earnings, posting an earnings per share (EPS) of $0.81, which exceeded analysts’ expectations of $0.80. The company generated $322 million in revenue, slightly below the anticipated $323.64 million. Despite the earnings beat, the revenue miss and future guidance led to a decline in the company’s stock. LivaNova has set a target for 6-7% organic revenue growth in 2025 and is preparing for new product launches and FDA submissions. The company has demonstrated a strong performance with a full-year organic revenue growth of 11% and a 70% year-over-year increase in adjusted free cash flow, reaching $163 million. LivaNova’s adjusted gross margin improved to 69%, up from 68% the previous year, while its adjusted operating income was $56 million with a 17% margin. Looking ahead, LivaNova is focusing on expanding its product portfolio, particularly in VNS therapy and obstructive sleep apnea programs, with significant investments in innovation and capacity expansion initiatives.
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