In a research report to clients last week, Paradigm listed its top picks for the first quarter of 2017 and Opsens made the cut. Analayst Christopher Lam has a “Buy” rating and a one-year target price of $2.50 on the stock. He thinks the groundwork the company laid in 2016 will generate results in the new year.
“Through FY16, Opsens has generated strong clinical momentum and demonstrated accelerating q/q FFR revenue growth,” he says. “Cash from a recent financing will be put to work in the quarter to expand commercial activities in the U.S. and internationally. Q1 results will be reported on Jan. 24, 2017, and we expect another record quarter. We expect $3M in FFR sales, representing growth of 47% q/q and 245% y/y. A near-term production capacity target of 1,000 units/week supports an annualized revenue run rate of $25–$30M.”
Opsens is coming off a year in which its OptoWire II guidewire to measure Fractional Flow Reserve (FFR) was authorized for sale in the U.S., Europe, Japan and Canada. FFR revenue was $5.2 million for fiscal 2016 compared with $0.5 million in fiscal 2015.
“We are confident that the distinctive features of the OptoWire, widely recognized by key opinion leaders in interventional cardiology, will allow us to capitalize on the rapidly growing FFR market,” said CEO Louis Laflamme when the company reported its annual results on November 16. “Our move into a modern facility and the ongoing production process improvement will enhance our competitiveness and our ability to meet the growing demand for our products. We are taking the necessary measures to become a disruptive player in the industry. For 2017, we are targeting significant gains in global market share.”
Lam thinks Opsens will produce EBITDA of negative $2.3-million on revenue of $24.5-million in fiscal 2017. He expects these numbers will improve to positive EBITDA of $14.0-million on a topline of $47.5-million the following year.
At press time, shares of Opsens were even at $1.60.
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