On Tuesday, Piper Sandler reiterated its Overweight rating on Alpha Tau Medical Ltd. (NASDAQ:DRTS) stock with a steady price target of $7.00.
The firm's assessment followed Alpha Tau Medical's first quarter results, which revealed an operating loss of $8.4 million. This figure is notably lower than the anticipated $9.8 million loss forecasted by Wall Street analysts.
Alpha Tau Medical, a medical device company, reported a consistent and low cash burn rate of approximately $4 million. The company's clinical trial updates showed steady progress, particularly in its ReSTART U.S. pivotal trial for recurrent cutaneous squamous cell carcinoma (cSCC) and a Canadian pancreatic cancer study. These updates align with the information provided in early March.
According to Piper Sandler, the current trials and milestones are moving forward as planned, with no significant changes since the last update. The firm expressed confidence in the stock's potential, citing the significant clinical benefits of Alpha Tau Medical's Alpha DaRTs technology.
They believe that despite the current liquidity issues faced by investors, those who remain patient will be rewarded with attractive returns in the long run.
Alpha Tau Medical's latest financial results and clinical trial statuses indicate the company's ongoing efforts to advance its medical technologies. Piper Sandler's unchanged stance on the stock suggests a continued belief in the company's value proposition and future prospects.
InvestingPro Insights
Alpha Tau Medical Ltd. (NASDAQ:DRTS) presents a mix of financial stability and operational challenges as reflected in the latest InvestingPro data and tips. With a market capitalization of $188.81 million, the company's balance sheet reflects a position of liquidity, holding more cash than debt, which is a positive sign for investors concerned about financial solvency. Additionally, Alpha Tau Medical's liquid assets surpass its short-term obligations, further emphasizing its ability to meet immediate financial liabilities.
However, the company's growth and profitability metrics suggest some areas of concern. A negative P/E ratio of -6.43 indicates that the company is not currently profitable, a sentiment echoed by analysts who do not expect Alpha Tau Medical to be profitable this year. This is corroborated by the company's operating income, showing an adjusted loss of $35.68 million over the last twelve months as of Q4 2023. Additionally, with a negative EBITDA growth rate of -11.07% during the same period, it is clear that the company is facing challenges in maintaining its earnings trajectory.
Despite these hurdles, InvestingPro Tips reveal that Alpha Tau Medical does not pay a dividend to shareholders, which may be a strategic move to reinvest earnings into the company's growth and clinical trials. For investors seeking more in-depth analysis, InvestingPro offers additional tips on Alpha Tau Medical, and users can unlock these insights with a special coupon code. Get an additional 10% off a yearly or biyearly Pro and Pro+ subscription using the code PRONEWS24.
Overall, while Piper Sandler maintains an Overweight rating on Alpha Tau Medical, investors should consider both the financial stability and the profitability challenges highlighted by InvestingPro before making investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.