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On Friday, Truist Securities revised its price target for Vericel Corporation (NASDAQ:VCEL), reducing it to $61.00 from the previous $67.00, while maintaining a Buy rating on the company’s shares. The adjustment follows Vericel’s recent financial updates, which included an impressive gross margin of 72.55% and strong EBITDA performance. According to InvestingPro data, the company maintains robust financial health with a GOOD overall score, supported by liquid assets exceeding short-term obligations. Despite a roughly $2 million shortfall in Epicel revenue, this was somewhat compensated for by stronger performance and accelerated growth from MACI, a product for cartilage repair.
The updated guidance for the first quarter of 2025 revenue was noted to be below consensus estimates, with expectations for a more significant contribution later in the year. Analysts at Truist believe that the company’s reiterated full-year 2025 guidance is conservative, considering the potential for increased sales following the launch of MACI Arthro, a new product in the pipeline.
Truist’s outlook suggests that the current guidance might serve as a base, with the introduction of MACI Arthro and another product, Nexobrid, potentially leading to greater growth acceleration in 2025 and beyond. The firm views Vericel as a standout small to mid-size (SMID) growth company, with prospects of over 20% growth and a positive turn in profitability and cash flow.
The maintained Buy rating indicates Truist’s continued confidence in Vericel’s stock performance. The new price target of $61, down from $67, reflects adjustments based on the latest financial data and market expectations. Despite the lowered target, the positive outlook for the company’s growth trajectory and product launches remains a key factor in the firm’s investment thesis.
In other recent news, Vericel Corp reported strong financial results for the fourth quarter of 2024, with a 20% year-over-year increase in total revenue, reaching $237.2 million. The company also achieved a net income of $10.4 million, a notable improvement from a loss of $3.2 million in 2023. Vericel’s gross margin hit a record high of 78% for the quarter, contributing to a full-year gross margin of 73%. The company provided optimistic guidance for 2025, projecting revenue growth of 20-23%. Analysts have shown confidence in Vericel’s strategic initiatives, as reflected in the company’s performance. The company’s MACI and burn care franchises were key drivers of growth, with MACI revenue increasing by 21% in the fourth quarter. Additionally, Vericel’s expansion plans include international market entry, with MACI Arthro adoption showing strong early indicators.
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