On Friday, Barclays (LON:BARC) upgraded RadNet shares, moving its rating from Equal Weight to Overweight and increasing the price target to $79 from $57. The adjustment follows a recent clinic tour and meeting with RadNet's CFO Mark Stolper and SVP of Northeast Operations Vickie Bedel, which provided Barclays with a closer look at the company's operations and advancements in artificial intelligence for radiology.
The Barclays analyst indicated that the first-hand experience led to a stronger belief in the potential of AI in the field of radiology. RadNet, which operates the largest radiology business in the United States, is seen as having a first-mover advantage in this area. The company's ability to develop and train AI using data from its own operations gives it a distinct edge over competitors.
In the meeting, the potential benefits of AI in radiology were outlined, suggesting that RadNet's embrace of AI technology could significantly enhance its services. The analyst's increased price target of $79 is based on 20 times RadNet's projected 2025 EBITDA-NCI, a financial metric indicating the company's profitability excluding certain costs.
The upgrade to Overweight reflects a positive outlook for RadNet's stock, implying that Barclays expects the stock to outperform relative to the broader market or its sector. The decision to raise the price target and upgrade the stock rating is a result of Barclays' increased confidence in RadNet's AI initiatives and their potential to drive growth and profitability for the company.
In other recent news, RadNet, Inc. reported a substantial increase in revenue and adjusted EBITDA for the second quarter of 2024. The company's total revenue rose by 13.9% to $459.7 million, and adjusted EBITDA grew by 19.7% to $72.3 million. This growth is attributed to high demand, improved reimbursement rates, and the successful integration of artificial intelligence (AI) into its Digital Health business.
In a separate development, DeepHealth, a subsidiary of RadNet, has partnered with AI firm HOPPR to enhance radiology diagnostics and workflow through advanced AI models. The collaboration aims to develop models for detecting breast, prostate, and lung cancer, thereby improving diagnostic accuracy and speeding up image analysis. This partnership is expected to strengthen DeepHealth's AI-powered health informatics portfolio and support the evolution of radiology.
These are recent developments that have been reported. The growth in RadNet's total revenue and adjusted EBITDA indicates a positive trajectory for the company. The partnership between DeepHealth and HOPPR is set to advance the company's mission to empower care breakthroughs through new diagnostic imaging technologies. The integration of these models is intended to enhance patient care and outcomes in radiology.
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