IRadimed Corp.'s (IRMD:NASDAQ) Q2/23 financial results were "at the high end of expectations," and based on higher forecasts, ROTH Capital Partners raised its target price on the medical technology firm, reported analyst Scott Henry in an Aug. 7 research note.
This company develops, manufactures and distributes magnetic resonance imaging (MRI)-compatible medical devices and related accessories and services.
ROTH's new target on IRadimed is $55 per share, up from $50, reflecting a 10% increase, noted Henry. This resulted from the financial services firm increasing its revenue and earnings per share (EPS) estimates for 2024.
Given IRadimed's current share price is about $48.42 per share, the return to target implies a 14% return for investors.
The Florida-based company remains a Buy.
Revenue beats expectations
Henry reviewed IRadimed's Q2/23 financial results. The highlight was revenue, which was $16.1 million ($16.1M). It was up 27% year over year and 4% quarter over quarter. Also, it exceeded ROTH's $15.7M forecast.
The pump segment drove revenue, noted Henry, generating $4.5M, ahead of ROTH's $3.9M estimate. Disposables revenue also was a beat, at $5.3M against ROTH's $5M estimate.
Monitors revenue, however, fell short of ROTH's $6.5M projection, coming in at $6.1M.
"This is largely timing related, and we expect that Monitors will drive growth the rest of the year," Henry wrote.
Sales of IRadimed's new ferrous metal detector product totaled $183,000, less than ROTH's $325,000 target.
Gross margins trailed ROTH's estimate, coming in at 75.5% compared to 77%. Gross profit was in line, at $12.2M versus $12.1M.
IRadimed spent $7.2M during Q2/23, less than ROTH's $7.7M forecast.
Net, EPS was $0.36, which exceeded ROTH's $0.31 projection.
Guidance gets boost
Henry reported IRadimed increased its revenue guidance for full-year 2023 to $64.5–$65.5M from $62–$63.5M.
Similarly, earnings per share is now estimated to be between $1.37 and $1.40, up from $1.26–1.35.
What to watch for
The med tech company has some material catalysts ahead, Henry pointed out.
In 2024, IRadimed expects to gain a greater share of the MRI monitors market, an opportunity worth about $100M in revenues annually as estimated by ROTH. Henry noted that Philips, also in the MRI market, seems less focused on this segment, and this should benefit IRadimed.
A major stock-moving event on track for early 2025 is the company taking its next-generation pump to market. Management now targets Q1/24 for resubmitting the application for it to the U.S. and Food and Drug Administration, and the agency taking about a year to review and approve it.
| Want to be the first to know about interesting Medical Devices investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
