iRhythm stock rises on strong Q4 results and outlook

Investing.com -- Shares of iRhythm Technologies (NASDAQ: IRTC) climbed 8% following the company’s announcement of positive fourth-quarter earnings and an encouraging forecast for the future.

iRhythm Technologies reported a fourth-quarter earnings per share (EPS) of $0.01, which was significantly higher than the analyst estimate of a $0.35 loss per share. The company’s revenue for the quarter was $164.3 million, surpassing the consensus estimate of $157.12 million and marking a 24% increase from $132.5 million in the fourth quarter of the previous year.

The company’s guidance for the fiscal year 2025 anticipates revenue between $675-685 million, which brackets the consensus estimate of $679.4 million. This guidance reflects the company’s continued growth trajectory and investor confidence in its strategies.

According to a press release, iRhythm’s fourth quarter concluded a transformative year characterized by 24% revenue growth and significant operational achievements, including a record number of new account onboarding. The company’s gross margin also improved by 410 basis points to 70.0% compared to the same quarter last year, due to operational efficiencies and a higher volume of patients served.

The net loss for the quarter showed a considerable improvement, at $1.3 million compared to a net loss of $38.7 million in the fourth quarter of 2023. For the full year, the company reported a 20.1% increase in revenue to $591.8 million and an improved net loss of $113.3 million, down from $123.4 million in the previous year.

iRhythm’s CEO, Quentin Blackford, highlighted the company’s growth across customer channels and the value of Zio as a population health management tool, particularly in primary care settings. Blackford emphasized the company’s focus on expanding its U.S. market presence, accelerating international growth, and advancing product innovation.

JPMorgan analyst Robbie Marcus responded positively to the results, raising the price target on iRhythm Technologies to $145.00 from $97.00 and maintaining an Overweight rating. Marcus noted the company’s momentum exiting the fourth quarter and a conservative outlook, stating, "While we’re not out of the woods on the regulatory front just yet, we continue to like the setup into 2025 as momentum exiting 4Q and a conservative outlook should enable further beat and raise quarters."

This sentiment was echoed by other analysts, including Citi’s Joanna Wuensch and BTIG’s Marie Thibault, who raised their price targets on the stock while maintaining their Buy ratings, citing strong revenue growth, expense management, and broad-based strength across channels and products.

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