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On Friday, TD Cowen reaffirmed its positive stance on Establishment Labs Holdings Inc . (NASDAQ: NASDAQ:ESTA), maintaining a Buy rating and a $60.00 price target for the company’s shares. The stock, currently trading at $32.24, has seen significant volatility recently, with a 16.25% decline in the past week. According to InvestingPro data, analyst targets range from $42 to $62, suggesting substantial upside potential from current levels. The reiteration comes after a deeper analysis of the impact of new tariffs on the medical technology sector, specifically on Establishment Labs. According to the firm, the company is one of the least affected within its coverage universe, with potential annual profitability impacts being as minimal as approximately $500,000. This is particularly significant given the company’s current financial position, with InvestingPro analysis showing a strong current ratio of 3.56, indicating robust liquidity to manage near-term obligations.
Establishment Labs, with its operational base in Costa Rica, appears to be well-shielded from the recent tariff headwinds compared to its peers. This advantage stems from the company’s historical benefit of tariff-free trade with the United States, China, and many European countries. Despite the Trump administration’s recent announcement of a new reciprocal tariff policy, which will introduce a minimum tariff of 10% on products from Costa Rica, Establishment Labs is expected to manage the situation effectively.
The new tariffs, as clarified by TD Cowen, will not affect the end market price of Establishment Labs’ products. Instead, they will apply to the Customs Value, which typically encompasses the cost of goods and the cost of importation. This detail suggests that the direct financial impact on the company may be less than initially anticipated.
The analyst’s note comes after the April 2nd review, where the initial assessment of ESTA’s exposure to the new US tariff policy was discussed. Since then, further investigation has reinforced the belief that Establishment Labs is poised to navigate through these new trade policies with relative ease.
Establishment Labs Holdings Inc. specializes in the development and commercialization of innovative medical devices, particularly in the aesthetic and reconstructive markets. The company’s resilience in the face of new tariffs is a testament to its strategic positioning and operational efficiency. With revenue of $166.03 million in the last twelve months and a gross profit margin of 66%, the company shows strong operational capabilities despite current challenges. The maintained Buy rating and price target reflect confidence in the company’s ability to mitigate the potential financial repercussions of the tariff changes. For deeper insights into ESTA’s financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, consider accessing the full company analysis through InvestingPro’s detailed research reports.
In other recent news, Establishment Labs Holdings Inc. reported its fourth-quarter 2024 earnings, revealing a significant miss on EPS forecasts with an EPS of -$1.19 against the expected -$0.64, and a revenue of $44.5 million, slightly below the anticipated $44.7 million. Despite this, the company experienced a 41% year-over-year revenue increase. Mizuho (NYSE:MFG) Securities adjusted its price target for Establishment Labs to $58 from $70, maintaining an Outperform rating, following the company’s earnings report. The firm highlighted the successful U.S. launch of Motiva breast implants, with fourth-quarter sales of $3.3 million and an anticipated $5.5 million contribution in the first quarter of 2025. TD Cowen also revised its price target for Establishment Labs to $60 from $75, while maintaining a Buy rating, citing strong early adoption trends of Motiva implants in the U.S. market. Establishment Labs projects its fiscal year 2025 sales to reach between $205 million and $210 million, slightly surpassing the Street’s estimate. The company aims for positive EBITDA by Q3 2025, with U.S. Motiva sales expected to reach at least $35 million.
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