On Monday, BofA Securities adjusted its price target for Merit Medical Systems , Inc. (NASDAQ:MMSI) shares, increasing it to $103.00 from the previous $92.00. The firm maintained a Neutral stance on the stock. The revision follows the presentation of six-month pivotal data from Merit's WRAPSODY device at a medical conference in Portugal over the weekend.
The WRAPSODY device, designed for maintaining vascular access in hemodialysis patients, demonstrated a six-month target lesion primary patency (TLPP) rate of 90%. This rate significantly outperformed the percutaneous angioplasty (PTA) control group's 63% TLPP.
Furthermore, WRAPSODY's results were notably better than anticipated and surpassed the outcomes from primary competitors in their clinical trials, with Gore's Viabahn at 53% and BDX's Covera at 79%.
Despite the fact that covered stents are currently underutilized, the prevalence of end-stage renal disease (ERSD) presents a considerable opportunity for the WRAPSODY device. The strong clinical data from WRAPSODY could become a key factor in increasing market penetration once the product is launched early next year.
The new price target is based on a 19 times multiple of the estimated 2025 enterprise value to EBITDA (EV/EBITDA), an increase from the prior multiple of 17 times. BofA Securities expresses optimism about the WRAPSODY data but awaits further details regarding the product's market launch, potential market opportunity, and its expected contribution to the company's performance.
In other recent news, Merit Medical Systems showed a strong financial performance in the second quarter of 2024, with total revenue reaching $338 million, marking a 5.6% increase year-over-year. This was driven by organic growth and acquired products, including the acquisition of EndoGastric Solutions for $105 million. The company's updated financial guidance for 2024 projects a net revenue increase of 6-7% and non-GAAP diluted EPS growth of 15-17%.
Piper Sandler increased the price target on Merit Medical's stock to $110, maintaining an Overweight rating, ahead of the anticipated presentation of the WAVE trial data for the company's WRAPSODY product. BofA Securities also raised its price target for the company's shares to $92, maintaining a Neutral rating, following strong Q2 earnings.
Analysts from both firms highlighted the potential approval of WRAPSODY in the United States as a primary catalyst for the company's stock. These are some of the recent developments for Merit Medical Systems.
InvestingPro Insights
Merit Medical Systems, Inc. (NASDAQ:MMSI) has caught the attention of investors with its promising WRAPSODY device data. According to real-time metrics from InvestingPro, Merit Medical Systems boasts a market capitalization of $5.6 billion, reflecting its significant presence in the medical device sector. The company's stock is trading at a high earnings multiple, with a P/E ratio of 47.49, suggesting that investors may be expecting high earnings growth in the future. This is supported by an InvestingPro Tip indicating that net income is expected to grow this year.
Moreover, Merit Medical Systems operates with a moderate level of debt and has liquid assets that exceed short-term obligations, providing financial stability as it gears up for the WRAPSODY device market launch. The company's revenue growth over the last twelve months has been 8.6%, showcasing its ability to expand its financials steadily. With analysts predicting profitability this year, as per another InvestingPro Tip, and a strong return over the last three months of 17.56%, the company's stock is trading near its 52-week high, at 98.08% of the peak price.
For readers interested in a deeper dive into Merit Medical Systems' performance and potential, InvestingPro offers additional insights, with a total of 15 InvestingPro Tips available at https://www.investing.com/pro/MMSI. These tips provide a more comprehensive view of the company's financial health and market position, which could be particularly valuable as the company approaches the launch of its WRAPSODY device.
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