Wells Fargo lifts iRhythm stock rating, targets $130

Published 02/05/2025, 12:00
Wells Fargo lifts iRhythm stock rating, targets $130

On Friday, Wells Fargo (NYSE:WFC) analyst Nathan Treybeck upgraded iRhythm Technologies stock from Equal Weight to Overweight, adjusting the price target to $130 from $104. The upgrade reflects confidence in the company’s business trends and potential for exceeding its raised guidance. The stock, which has surged 44.7% over the past six months, currently trades at $108.59. According to InvestingPro data, analyst targets range from $104 to $152, with the stock receiving a strong buy consensus.

Treybeck highlighted several positive factors influencing the decision, including iRhythm’s strong performance and management’s belief in the sustainability of Zio AT unit volume growth. The company’s success in opening new accounts, gaining traction with primary care physicians (PCPs), and making progress with value-based care accounts were also cited as key drivers for the optimistic outlook. InvestingPro analysis reveals impressive revenue growth of 20.1% over the last twelve months, with the company maintaining a healthy gross profit margin of 68.9%.

iRhythm Technologies has been making strides in addressing undiagnosed arrhythmias and has seen healthy order trends from Epic Aura accounts. The firm’s confidence also stems from the company’s regulatory remediation plan and the anticipated path to approval for the Zio MCT, which is not expected to face any significant obstacles. The company maintains strong liquidity with a current ratio of 5.82, while operating with a moderate debt level, as highlighted in InvestingPro’s comprehensive analysis.

The analyst’s statement underscored the company’s robust new account openings in previous quarters and the strong traction with PCPs. Additionally, the growth in Zio AT unit volume and the progress with value-based care accounts contribute to the positive assessment.

Wells Fargo’s revised price target of $130 for iRhythm Technologies represents a significant increase from the previous target of $104, indicating a strong belief in the company’s future performance and its ability to surpass guidance expectations in 2025.

In other recent news, iRhythm Technologies reported a notable 20.3% year-over-year increase in first-quarter revenue, reaching $158.7 million, surpassing both analysts’ estimates and consensus expectations. The company also reported a narrower-than-expected adjusted net loss per share of $0.95, slightly better than the forecasted loss of $0.96. Following this positive earnings announcement, iRhythm raised its full-year 2025 revenue guidance to between $690 million and $700 million. Analyst firms have reacted to these developments, with Canaccord Genuity cutting its price target for iRhythm to $139 while maintaining a Buy rating, and BTIG increasing its price target to $140, also reiterating a Buy rating. The Zio AT product line has been a significant contributor to iRhythm’s performance, driving market share gains and revenue growth. Additionally, iRhythm is advancing its regulatory goals and has launched its commercial operations in Japan. The company is actively addressing compliance issues with the FDA and plans to complete remediation efforts by mid-2025.

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