On Thursday, Pulmonx Corp. (NASDAQ:LUNG) experienced a revision in its outlook by Canaccord Genuity shares, with the firm reducing the price target to $15 from the previous $16 while still upholding a Buy rating on the shares. This adjustment comes after Pulmonx reported its first-quarter revenue for 2024, which was largely in line with Canaccord's estimates and slightly ahead of the consensus.
Pulmonx's revenue for the first quarter reached $18.9 million, marking a 30% year-over-year increase, with currency constant growth at 29%. This figure was just above the consensus estimate of $18.0 million and marginally below Canaccord's projection of $18.8 million.
The U.S. sales contributed $12.9 million, a 38% increase from the previous year, yet it fell short of both Canaccord's $13.4 million estimate and the consensus of $13.0 million. However, international sales exceeded expectations at $6.0 million, surpassing both the firm's $5.5 million forecast and the consensus estimate of $5.9 million.
In terms of earnings, Pulmonx reported a first-quarter EPS of ($0.36), which was significantly better than Canaccord's estimate of ($0.48) and the consensus of ($0.47). The company's performance was bolstered by stronger gross margins and operational expenditures than anticipated.
The quarterly earnings call was also notable as it marked the first time that investors heard from Pulmonx's new CEO, Steve Williamson, and CFO, Mehul Joshi. The new leadership confirmed the continuation of the commercial strategy set by the previous management. Pulmonx's guidance for the future remained unchanged.
Canaccord anticipates that the confirmation of the company's strategic direction under the new management, combined with robust first-quarter results, will position Pulmonx for a strong relief rally.
The firm highlighted Pulmonx's ongoing commercial efforts in the U.S., which include increasing adoption at existing centers, expanding the total addressable market through its CONVERT trial work, and progressing with its post-approval study in Japan.
Despite the lowered price target, which was attributed to reduced valuation comparables within the group, Canaccord maintains a positive outlook on Pulmonx's stock.
InvestingPro Insights
Pulmonx Corp. (NASDAQ:LUNG) has shown a notable revenue growth of 27.14% over the last twelve months as of Q1 2024, with a recent quarterly increase of 29.71%, reflecting the company's upward trajectory in sales. Despite this growth, an InvestingPro Tip highlights that analysts have revised their earnings downwards for the upcoming period, suggesting that market expectations are adjusting. It's also worth noting that according to InvestingPro Data, the company's market capitalization stands at $299.63 million, and while Pulmonx holds more cash than debt, signaling financial stability, it's currently not profitable with a negative P/E ratio of -5.01.
InvestingPro Tips also indicate that Pulmonx's liquid assets exceed short-term obligations, which may provide some reassurance to investors about the company's ability to meet its short-term liabilities. However, the price of Pulmonx shares has seen a significant decline over the last three months, with a 45.86% drop. This could be seen as a potential buying opportunity for investors believing in the company's fundamentals, especially considering the company's robust gross profit margin of 74.31%.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that could provide further insights into Pulmonx's financial health and future prospects. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore these valuable insights to inform your investment decisions.
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