CRH Medical gets modest price target raise at Clarus

Following a solid second quarter, Clarus Securities analyst Noel Atkinson has raised his price target on CRH Medical Corp. (CRH Medical Corp. Stock Quote, Chart, New: TSX:CRH).

CRH yesterday reported its Q2, 2016 results. The company posted revenue of $16.58-million, 52 per cent better than the $10.88-million topline it reported in the same period a year prior.

“During the second quarter we completed three acquisitions and increased our revolving credit facility,” said CEO Edward Wright. “We generated record revenue and operating earnings before interest, taxes, depreciation and amortization for another quarter, reinforcing our growth strategy and the financial strength of our business model.”

Atkinson says the results beat both his and the street consensus on revenue. He notes that the company’s anesthesia unit drove most of the gains, generating (U.S.) $13.9-million in revenue. The analyst says the results are positive enough to warrant a slight uptick in his forecasts.

“Based on the strong result in Q2, we are modestly increasing our estimates for 2016 and 2017,” says Atkinson. “Our 2016 forecast rises to US$72.5MM (+US$0.7MM versus our prior estimate) and Operating EBITDA to CRH shareholders of US$30.3MM (+US$0.4MM). We now project 2017 revenues of US$92.7MM (+US$1.1MM) and Operating EBITDA to CRH shareholders of US$38.9MM (+US$0.6MM).”

In a research update to clients today, Atkinson maintained his “Buy” rating on CRH Medical Corp., but raised his one-year target price on the stock from $6.75 to $7.00.