UBS raises Penumbra stock price target to $320, keeps buy rating

On Wednesday, UBS analyst Priya Sachdeva increased the price target for Penumbra (NYSE:PEN) to $320 from $305, while maintaining a Buy rating on the company’s shares. The adjustment follows Penumbra’s recent fourth-quarter earnings report and the release of its 2025 financial guidance. According to InvestingPro data, the stock is currently trading near its 52-week high at $299.04, with a market capitalization of $11.49 billion.

Sachdeva’s commentary highlighted a positive outlook for Penumbra, noting the potential for shares to rise based on the company’s performance in the fourth quarter and its future plans. The company’s solid financial health is reflected in its impressive gross profit margin of 63.2% and strong current ratio of 6.01, as reported by InvestingPro. The analyst believes that Penumbra’s ability to expand its mechanical product penetration and market share with the CAVT portfolio is a strong indicator of its growth trajectory.

Despite the 2025 top-line growth guidance of 12-14% not signaling a significant acceleration, Sachdeva interprets this as a conservative estimate from management rather than a lack of confidence in the company’s growth potential. This guidance aligns with the company’s recent performance, as InvestingPro data shows revenue growth of 12.86% in the last twelve months. The guidance suggests a steady, rather than explosive, growth rate for Penumbra in the coming year. InvestingPro subscribers have access to 13 additional key insights about Penumbra’s valuation and growth prospects through the comprehensive Pro Research Report.

Penumbra’s CAVT portfolio, which stands for Catheter Aspiration Vacuum Technology, is a key factor in the company’s strategy to capture more of the market. This technology is used in various medical procedures, including stroke intervention and peripheral thrombectomy, which are areas where Penumbra has been focusing its efforts.

The UBS analyst’s price target increase is based on the belief that the company will continue to make inroads in these markets, leveraging its CAVT portfolio to gain a larger share and drive revenue growth. The Buy rating suggests that UBS sees Penumbra’s stock as a good investment based on current information and future expectations. The company maintains a "GREAT" overall financial health score of 3.25 on InvestingPro’s comprehensive evaluation system, which considers multiple financial metrics and growth indicators.

The announcement of the raised price target and the maintained Buy rating comes as Penumbra continues to execute on its strategic initiatives and demonstrate its ability to innovate within the medical device industry.

In other recent news, Penumbra has reported strong financial results for the fourth quarter of 2024, with earnings per share (EPS) of $0.97, exceeding the forecast of $0.90. The company achieved revenue of $321.3 million, surpassing expectations of $311.3 million. Following these results, Canaccord Genuity raised its price target for Penumbra shares to $340, maintaining a Buy rating, while BTIG increased its target to $308. Analysts have noted significant growth in Penumbra’s U.S. thrombectomy business, with a 27.3% year-over-year increase, driven by the vascular thromboembolism (VTE) franchise, which grew by 41%.

Penumbra’s adjusted EBITDA for the fourth quarter reached $63.7 million, well above estimates, and its gross margin improved to 67.4%. For the fiscal year 2025, the company has projected revenue growth of 12-14%, with anticipated gross margins exceeding 67% and operating margins between 13% and 14%. Penumbra plans to expand its manufacturing capacity with a new facility in Costa Rica. The company also exited its immersive healthcare business to focus on core operations. Analysts from Canaccord Genuity and BTIG express confidence in Penumbra’s ongoing profitability and growth prospects, highlighting the company’s innovation and market leadership.

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