On Monday, Jefferies, a global investment banking firm, adjusted its outlook on Celcuity Inc (NASDAQ: NASDAQ:CELC), reducing the biotech company's price target from $98.00 to $68.00, while reaffirming a Buy rating on the stock. This change comes amidst a broader slowdown in the sector, with Celcuity's shares experiencing a 14% decline year-to-date, paralleling a 10% drop in the Consumer Staples Select Sector SPDR Fund (XLP).
The analyst from Jefferies expressed that although a deceleration in business growth was anticipated after consistent doubling in revenue since 2020, the rapidity of the slowdown was unexpected. Additionally, the overall category's growth slowing to a mere 2.6% was not foreseen, as highlighted by the performance of Monster Beverage Corporation (NASDAQ: NASDAQ:MNST), which also saw its shares dip by 14%.
In response to these market dynamics, Jefferies has revised its revenue growth expectations for Celcuity in 2024 down to 20%, a decrease of 860 basis points. However, this tempered outlook is partly mitigated by the anticipation of EBITDA margin expansion later on. Despite the reduced growth forecast, the valuation still implies approximately a 15% market share in the United States for Celcuity, a target the firm believes is attainable over time.
The Jefferies analyst concluded with a positive long-term perspective on Celcuity, stating, "We are resetting our expectations by dropping '24 rev growth to 20% (-860bps), somewhat offset by EBITDA margin expansion later. Valuation implies ~15% US share, we still think Celsius gets there, in time. Pos long-term. Reiterate Buy, PT to $68." This indicates a sustained confidence in the company's potential to reach its market share goals despite the current industry headwinds.
In other recent news, Celcuity Inc., a clinical-stage biotechnology company, has been making significant strides in its operations. The company reported a net loss of $21.6 million in its first quarter financials for 2024, a substantial increase from the $11.9 million net loss in the same period last year, primarily due to increased research and development expenses related to their ongoing clinical trials.
Celcuity has also announced the pricing of an underwritten public offering of 3,871,000 shares of its common stock at $15.50 per share, expected to generate gross proceeds of approximately $60.0 million. The proceeds will be allocated towards working capital, research and development, clinical trials, and the expansion of business development activities.
In terms of the company's clinical trials, Celcuity intends to initiate a Phase 3 trial for gedatolisib, in combination with a CDK4/6 inhibitor and fulvestrant, as a first-line treatment for HR+/HER2- advanced breast cancer patients who are resistant to endocrine therapy. The brokerage firm Stifel has maintained its Buy rating and $40.00 price target for Celcuity, citing the potential market opportunity for gedatolisib in treating hormone receptor-positive metastatic breast cancer.
InvestingPro Insights
As investors consider the revised outlook from Jefferies on Celcuity Inc (NASDAQ: CELC), real-time data and insights from InvestingPro can provide additional context. Celcuity's market capitalization stands at $640.6 million, reflecting its position in the market. Despite the challenges, the company's balance sheet shows resilience with more cash than debt, which could provide a buffer against short-term market fluctuations. However, its trailing twelve-month P/E ratio of -8.65 indicates that the company is not currently profitable, aligning with analysts' expectations that profitability will not be achieved this year.
InvestingPro Tips suggest that while Celcuity's stock has taken a significant hit over the last week, with a price total return of -8.04%, the company's liquid assets exceed its short-term obligations, which could be a sign of financial stability. Additionally, the company's high return over the last year, at 63.95%, suggests that despite recent performance, the stock has had a strong showing over a longer period. It's important to note that Celcuity does not pay a dividend, which may influence investment decisions for income-focused investors.
For those looking to delve deeper into the financial health and future prospects of Celcuity, InvestingPro offers a range of additional tips. To explore these insights and benefit from the platform's comprehensive analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With Celcuity's next earnings date set for August 8, 2024, staying informed with the latest data and expert tips could be crucial for making well-informed investment decisions.
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