THTX stock keeps “Buy” rating at Research Capital

Following the company’s fourth quarter results, Research Capital analyst Andre Uddin has maintained his “Buy” rating on Theratechnologies (Theratechnologies Stock Quote, Chart, News, Analysts, Financials NASDAQ:THTX)

On February 21, THTX reported its Q4 and fiscal 2023 results. The company posted a Net Loss of $2.76-million on revenue of $23.5-million, a topline that was up 9.5 per cent over the same period last year.

“Fourth quarter of 2023 marked the highest quarterly revenue ever recorded in the history of Theratechnologies, delivering $23.5 million in revenue and ending 2023 with total annual revenue of $81.8 million,” said CEO Paul Lévesque. “This is a significant accomplishment considering the hurdles we faced in the first half of 2023 with inventory drawdowns and unfavorable gross-to-net challenges. Equally, we demonstrated strength on the bottom line, realizing a positive Adjusted EBITDA for the quarter of $5 million, more than doubling the third quarter result. We ended the year with a significant turnaround in Adjusted EBITDA of only $(2.9) million, an improvement of more than $19 million over 2022. Our efforts to be stringent with operating expenses while focusing on topline growth have been recognized in the marketplace, as exemplified by the recent financing that strengthened our balance sheet with new high-quality institutional investors such as Investissement Québec.”

Uddin says Theratechnologies is turning its ship around.

“THTX generated record Q4 sales of $23.5M below our estimate of $25.6M (and in-line with consensus estimates of $23.6M) vs. $21.4M last year,” he wrote. “THTX reported adj. EBITDA of $5M, above our estimate of $1.4M. As of Q4 end (Nov 30th), the company had cash of $40.4M and $58M in debt. THTX is guiding to $87-90M in sales (we were at $90M and the street was at $93M) and an adj. EBITDA range of $13-15M for FY2024 (we were at $8.9M). Egrifta SV prescriptions continue to drive growth, with the total number of unique patients hitting an all-time high at the end of CY2023 (up 13% Y/Y for Dec). The unique properties of Egrifta SV – lowering visceral fat and increasing lean muscle mass should provide a better alternative to GLP-1s for treating HIV patients. THTX is working diligently to address the CRL that was received by the FDA on January 23, 2024, for Egrifta MDV (F8 formulation of tesamorelin) – aiming to get this approved by year end. We await to see the FDA decision on the Trogarzo IM sBLA. Management has indicated they are very active looking for a complimentary drug(s) that would be accretive and would fit within their HIV commercial portfolio (they would also consider adding a metabolic disease drug that would require few reps).”

In a research update to clients February 21, Uddin maintained his “Buy” rating and target price of (US) $4.85 on THTX, implying a return of 179.1 per cent at the time of publication.

The analyst thinks THTX will generate EPS of negative $0.05 on revenue of $89.0-million in fiscal 2024. He expects those numbers will improve to EPS of positive $0.01 on a topline of $95.0-million the following year.