Street Calls of the Week
Investing.com - BTIG downgraded Vericel Corporation (NASDAQ:VCEL) from Buy to Neutral on Wednesday, removing its previous $45 price target as the firm reassessed growth prospects for the company’s MACI Arthro product. The company, currently valued at $1.68 billion, has maintained a healthy gross profit margin of 73.5% and achieved 16.1% revenue growth over the last twelve months.
The downgrade follows Vericel shares declining approximately 42% year-to-date after two softer quarters, with BTIG’s survey of MACI users suggesting limited potential for the MACI Arthro launch to drive numbers significantly higher than current expectations. According to InvestingPro data, three analysts have recently revised their earnings expectations downward for the upcoming period.
According to BTIG’s research, about 60% of surgeons surveyed expect no change to MACI volumes despite the Arthro option now being available, with little evidence that Arthro is unlocking new anatomical opportunities in cartilage repair as initially anticipated.
The research firm projects a low-20% increase in MACI procedure growth for fiscal year 2026, in line with Street estimates, with growth slowing beyond this to approximately 14.8% compound annual growth rate through fiscal year 2028.
With shares trading at approximately 5 times next twelve months enterprise value to sales, BTIG believes much of the weakness is already priced in, but without expected upside to results ahead, the firm sees limited catalysts to reignite investor interest in the stock. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with additional insights and 11 more ProTips available for subscribers.
In other recent news, Vericel Corporation reported its second-quarter 2025 earnings, showing a narrowed net loss and an increase in revenue. The earnings per share came in at a loss of $0.01, which was better than the forecasted loss of $0.03. However, revenue slightly missed expectations, totaling $63.24 million against the anticipated $64.61 million. Canaccord Genuity adjusted its price target for Vericel to $58.00 from $61.00, while maintaining a Buy rating, following mixed performance across its product lines. The company exceeded bottom-line expectations but faced challenges with its MACI product and Epicel’s revenue. Meanwhile, TD Cowen reiterated a Buy rating with a $55.00 price target, expressing confidence in Vericel’s MACI Arthro product, which is expected to sustain over 20% growth. The MACI Arthro offering, recently approved in the third quarter of 2024, is being rolled out across the United States. These developments reflect ongoing adjustments and expectations within Vericel’s market activities.
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