On Thursday, Canaccord Genuity maintained its Buy rating on Vericel (NASDAQ:VCEL) Corporation (NASDAQ:VCEL), with a steady price target of $57.00. The firm's stance comes after Vericel reported a robust financial performance, surpassing both revenue and earnings expectations for the quarter. The company saw significant growth in its Epicel product, achieving the highest quarterly revenue to date, and a record number of biopsies for its MACI product during Q3.
Vericel's strong quarter was highlighted by increased activity in both new and dormant Epicel accounts, spurred by the engagement associated with the launch of NexoBrid. The company also witnessed a record high in Q3 biopsies and the number of surgeons performing these biopsies for MACI. Vericel has recently celebrated the FDA's approval and subsequent launch of MACI Arthro, as well as the FDA's nod for the pediatric indication of NexoBrid.
The successful launch of MACI Arthro has already seen several cases, indicating a timely market entry. Furthermore, the NexoBrid launch is advancing with over 70 Pharmacy & Therapeutics (P&T) committee submissions. Approximately 50 burn centers have received P&T approval and have placed initial orders for the product. The goal now is to transition these centers from initial order placements to becoming regular users of NexoBrid.
Canaccord Genuity expressed confidence in Vericel's future growth prospects, citing the company's impressive 20% revenue compound annual growth rate (CAGR) in recent years. The firm anticipates that Vericel will sustain high growth by expanding its market reach through new indications and commercial execution. Vericel is expected to reach an inflection point of net income profitability for the fiscal year 2024, which is considered a differentiating factor given its current revenue trajectory.
In conclusion, Canaccord Genuity reaffirmed its Buy rating, emphasizing Vericel's potential for continued high growth and the onset of profitability, which is seen as a result of years of dedicated effort in building a business with solid foundations.
In other recent news, Vericel Corporation has made significant strides with recent FDA approvals and positive financial performance. The FDA approved Vericel's MACI Arthro, a product for arthroscopic knee repair, which is expected to expand the company's market reach. This approval aligns with Vericel's third-quarter expectations and is expected to increase the number of orthopedic surgeons using the product from 5,000 to 7,000.
In addition, the FDA has 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.
Vericel reported strong results for the second quarter of 2024, with record revenue of nearly $53 million, driven by growth in their MACI product and solid demand for NexoBrid. The company also raised its profitability outlook for the year.
InvestingPro Insights
Vericel Corporation's recent strong 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 Canaccord Genuity's observation of Vericel's impressive 20% revenue CAGR. This growth is also reflected in the company's robust quarterly revenue growth of 14.68% in Q2 2024.
InvestingPro Tips indicate that Vericel's net income is expected to grow this year, which corroborates Canaccord Genuity's prediction of the company reaching net income profitability in fiscal year 2024. Additionally, analysts predict that the company will be profitable this year, further supporting the positive outlook.
The stock has shown significant returns recently, with a 17% increase over the last month and a 34.91% year-to-date return. This performance aligns with the article's discussion of Vericel's strong quarter and successful product launches.
It's worth noting that Vericel operates with a moderate level of debt and its liquid assets exceed short-term obligations, suggesting a solid financial position as it moves towards profitability. However, investors should be aware that the stock is trading at high earnings and EBITDA valuation multiples, which may reflect the market's high expectations for future growth.
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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