Xtant Medical (NYSE:XTNT) had its price target lowered by Craig-Hallum to $1.50 from the previous target of $1.70, while the firm kept its Buy rating on the stock. The adjustment came after a reassessment of the near-term profitability expectations for the company, despite ongoing optimism about its innovation trajectory and product launches.
The company, known for its medical devices and regenerative medicine products, has recently introduced new products, including VBM and amnio solutions. These launches are part of Xtant Medical's continued innovation efforts, which are expected to bring additional new products to market in 2025. The analyst from Craig-Hallum expressed continued encouragement by these developments and the potential they hold for Xtant Medical's business growth.
However, the firm acknowledged that it had overestimated the speed and impact of bottom-line growth for Xtant Medical in the short term. This led to the revised price target, which reflects lower near-term EBITDA estimates. Despite this, the analyst's long-term outlook remains positive, with expectations of a profitable future driven by a product mix that includes higher average selling price (ASP) and higher margin advanced orthobiologics.
Craig-Hallum anticipates that Xtant Medical will eventually achieve 20% EBITDA margins over the medium to long term. This projection is based on the company's strategic focus on advanced orthobiologics, which are seen as key drivers of future profitability.
InvestingPro Insights
While Craig-Hallum maintains a positive outlook on Xtant Medical's innovation and product pipeline, recent InvestingPro data and tips offer additional context to the company's financial situation. Xtant's revenue growth has been impressive, with a 63.37% increase over the last twelve months as of Q2 2024, and a 48% quarterly growth in Q2 2024. This aligns with the analyst's optimism about the company's product launches and innovation trajectory.
However, InvestingPro Tips highlight some challenges. The company is "quickly burning through cash" and is "not profitable over the last twelve months," with a negative operating income of -$13.61 million. This supports Craig-Hallum's decision to lower the price target due to overestimated near-term bottom-line growth.
Despite these challenges, Xtant's gross profit margin stands at a healthy 61.61%, suggesting potential for future profitability if the company can manage its costs effectively. This could contribute to the analyst's expectation of eventual 20% EBITDA margins.
InvestingPro offers 6 additional tips for Xtant Medical, providing a more comprehensive analysis for investors considering the stock's potential. To gain access to these insights and more, consider exploring the full range of data available on InvestingPro.
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