On Thursday, Canaccord Genuity updated its assessment of AtriCure Inc. (NASDAQ:ATRC) shares, reducing the price target to $49.00 from the previous $57.00. Despite the adjustment, the firm maintained its Buy rating on the stock.
AtriCure's first-quarter revenue for 2024 reached $108.9 million, marking a 16.5% year-over-year increase and surpassing both Canaccord Genuity's and the Street's expectations, which were set at $107.4 million and $106.9 million, respectively.
The company's adjusted EBITDA for the first quarter of 2024 was reported at $2.8 million, slightly below the $3.1 million estimate provided by Canaccord Genuity. However, AtriCure has reaffirmed its full-year 2024 guidance, projecting revenues between $459 million and $466 million, which would represent a growth of 15% to 17% year-over-year, along with an adjusted EBITDA ranging from $26 million to $29 million.
The Minimally Invasive Ablation business, particularly the EPi-Sense product line, was highlighted for its strong performance in the quarter. Management remains optimistic about the potential growth from Pulmonary Vein Isolation (PVI) using EPi-Sense, citing the efficiency of the therapy for paroxysmal atrial fibrillation patients.
Despite the positive developments, AtriCure's Appendage Management segment underperformed, especially in the U.S. market. Management attributed this shortfall to a challenging comparison from the previous year for the MIS segment of AtriClip and for LARIAT, rather than the competitive pressure from Medtronic (NYSE:MDT)'s product launch. Notably, the open clip business, which directly competes with Medtronic, grew by 15% year-over-year.
Canaccord Genuity believes that the market reaction to the competitive dynamics and the segment's performance has created a buying opportunity for AtriCure's shares. The firm's decision to lower the price target is based on a reduction in comparable group multiples, not a change in the company's fundamental outlook.
InvestingPro Insights
Recent InvestingPro data paints a detailed picture of AtriCure Inc.'s (NASDAQ:ATRC) financial health and market performance. With a market capitalization of $1.2 billion, AtriCure's revenue growth has been robust, with an 18.7% increase over the last twelve months as of Q1 2024, aligning with the positive revenue trends noted by Canaccord Genuity. Despite the company's strong revenue growth, AtriCure's current P/E ratio stands at -29.2, reflecting the market's anticipation that the company will not be profitable this year, which is also supported by one of the InvestingPro Tips. Additionally, AtriCure's gross profit margin is impressive at 75.26%, yet the company's operating income margin is negative at -7.79%, indicating challenges in translating revenue into operational profitability.
InvestingPro Tips highlight that AtriCure's liquid assets exceed its short-term obligations, suggesting a solid liquidity position. However, the company does not pay dividends, which might be a consideration for income-focused investors. For those interested in AtriCure's stock, it's worth noting that the company has seen a significant return over the last week of 9.51%, despite a downward trend over longer periods. With these insights, investors can better gauge the investment potential of AtriCure. For a deeper dive into AtriCure's financials and additional InvestingPro Tips, visit: https://www.investing.com/pro/ATRC. There are 5 more InvestingPro Tips available for AtriCure, which can be accessed with an exclusive offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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