On Thursday, BTIG has increased the price target for Vericel (NASDAQ:VCEL) Corporation (NASDAQ:VCEL) to $56 from the previous $55, maintaining a Buy rating on the stock. The firm's decision comes after Vericel reported third-quarter revenue of $57.9 million, marking a 27.0% increase year-over-year and surpassing both BTIG's and consensus estimates of $55.2 million.
The revenue growth was attributed to an 18.9% rise in MACI sales and a significant 63.6% year-over-year increase in Epicel sales, which reached $12.1 million. Additionally, NexoBrid, a product for burn care, experienced a 37.5% quarter-over-quarter growth, generating $1.1 million in sales. The number of burn centers ordering NexoBrid expanded to 50, up from 40.
Vericel's financial performance prompted the company to maintain its full-year 2024 revenue guidance at $238 million to $242 million, indicating a 20-23% growth rate. The company expects approximately 20% growth for its MACI product. Furthermore, Vericel has improved its profitability outlook, with gross margins (GMs) and adjusted EBITDA margins expected to increase by 100 basis points to 72% and 22%, respectively.
BTIG also addressed early considerations for fiscal year 2025, noting that while some investors might view the projected ~20% year-over-year growth for MACI as a negative due to the lack of acceleration from the Arthro launch, BTIG believes Vericel is setting a realistic target. The firm anticipates significant upside from MACI Arthro in fiscal year 2025 and expects NexoBrid to continue its progressive build-up. These factors, combined with steady and increasing profitability, are seen as positioning Vericel shares favorably for the upcoming fiscal year.
In other recent news, Vericel Corporation has seen a strong financial performance, surpassing both revenue and earnings expectations for the quarter. The company reported a record revenue of nearly $53 million, driven by growth in their MACI product and solid demand for NexoBrid. Vericel also raised its profitability outlook for the year.
In addition to its financial performance, Vericel has received approval from the U.S. Food and Drug Administration (FDA) for MACI Arthro, a product for arthroscopic knee repair, which is expected to expand the company's market reach. The FDA has also approved Vericel's NexoBrid for pediatric use, extending the company's customer base to include around 20 pediatric burn centers in the United States.
Analyst firms such as TD Cowen, BTIG, and Canaccord Genuity have maintained a Buy rating on Vericel's stock, reflecting confidence in the company's direction and the potential impact of its expanded product portfolio.
Canaccord Genuity anticipates that Vericel will sustain high growth by expanding its market reach through new indications and commercial execution, expecting the company to reach an inflection point of net income profitability for the fiscal year 2024.
InvestingPro Insights
Vericel Corporation's strong financial performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's revenue growth of 20.39% over the last twelve months aligns with the reported 27.0% increase in third-quarter revenue. This growth trajectory is expected to continue, as one InvestingPro Tip suggests that net income is expected to grow this year.
The market has responded positively to Vericel's performance, with InvestingPro data showing a significant 9.08% return over the last week and a robust 17.0% return over the last month. This recent momentum is consistent with the company's maintained full-year revenue guidance and improved profitability outlook mentioned in the article.
However, investors should note that Vericel is trading at a high earnings multiple, with a P/E ratio of 3060. This valuation metric, along with the InvestingPro Tip indicating that the stock is trading at a high EBITDA valuation multiple, suggests that the market has high growth expectations for the company.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips for Vericel Corporation, providing a more comprehensive view of the company's financial health and market position.
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