Truist Securities has updated its financial outlook on OrthoPediatrics Corp. (NASDAQ: NASDAQ:KIDS), increasing the price target to $34 from the previous $30, while maintaining a Hold rating on the stock.
The firm's decision follows OrthoPediatrics' Investor Day presentation, which highlighted various growth factors for the company.
OrthoPediatrics Corp. is expected to leverage a range of growth drivers, including new product launches, additional target markets, and an expanding sales organization and geographic reach.
The elements are projected to support the company in achieving its newly outlined three-year long-range plan. This plan is aligned with consensus forecasts and anticipates high-teens revenue growth annually, along with a 300 basis point year-over-year adjusted EBITDA margin expansion.
The updated long-range plan has prompted Truist Securities to adjust their estimates to be consistent with both the company's projections and consensus numbers.
The strategic overview provided by OrthoPediatrics has instilled confidence in the firm, leading to the elevated price target.
Despite the positive outlook on growth drivers and the alignment with consensus forecasts, Truist Securities suggests that potential for multiple expansion might be restrained without a more rapid organic revenue growth, specifically beyond the 20% mark.
InvestingPro Insights
OrthoPediatrics Corp. (NASDAQ:KIDS) has been the subject of recent analysis following its Investor Day presentation, which has influenced Truist Securities to raise their price target. Adding to this, InvestingPro data and tips can provide additional context to the company's financial health and market performance.
InvestingPro data reveals a market capitalization of $765.18M, indicating the company's size and market value. Despite a negative P/E ratio of -28.62, reflecting that the company is not currently profitable, the revenue growth of 27.7% over the last twelve months as of Q2 2024, signals strong sales performance. Moreover, the substantial gross profit margin of 74.62% suggests that OrthoPediatrics is effective at controlling its cost of goods sold and maintaining profitability at the gross level.
From the InvestingPro Tips, it is noted that OrthoPediatrics does not pay a dividend, which could be relevant for income-focused investors. However, the company's liquid assets surpass its short-term obligations, indicating a solid liquidity position. Additionally, with a strong return over the last month of 24.17%, investors have seen a recent uptick in market confidence.
While analysts do not anticipate the company will be profitable this year, the moderate level of debt and significant recent returns may offer some balance to the company’s financial outlook. For investors seeking more in-depth analysis, there are additional tips available on InvestingPro, which can be found at InvestingPro's KIDS page.
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