THTX keeps “Buy” rating at Research Capital

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

On July 10, THTX reported its Q2, 2024 results. The company posted Adjusted EBITDA of $5.46-million on revenue of $22.0-million, a topline that was up 25%, year-over-year.

“I am pleased to wrap up this very strong second quarter with $22 million in revenue, $1 million in net income and $5.5 million in Adjusted EBITDA,” CEO Paul Lévesque said. “At this halfway mark of our fiscal year, we can reaffirm our full year 2024 guidance of revenues between $87 and $90 million and an Adjusted EBITDA in the range of $13 to $15 million. EGRIFTA SV® remains our priority brand, with key performance metrics showing consistent growth and continued strong gross margins. Moving forward we expect sales to align with patient demand, now that inventory levels have returned to normal. We continue to demonstrate strength on the bottom-line with our fourth straight quarter of near-flat-to-positive Adjusted EBITDA. In fact, for the first time in the Company’s recent history, we recorded a positive net income marking the beginning of a new and profitable journey for Theratechnologies.”

The analyst summarized the quarterly results.

“THTX reported Q2 results (May 31st) with total revenues of $22M and adjusted EBITDA of $5.4M, compared to $17.5M and ($6.1M) last year, respectively. The net income turned positive at $1M or f.d. $0.02/share, better than our estimate of ($1.6M) or f.d. ($0.03)/ share and consensus of ($1.0M) or f.d. ($0.03)/share. As of May 31st, THTX had $36M in cash and $58.5M in debt under the Marathon loan facility. THTX is expected to start repaying the long-term debt as of Aug 1st, 2024 for 36 months. It is possible the Marathon debt could be restructured to more favourable terms given that the company is now in much stronger financial position than when the loan was put in place. Second half sales should be stronger as inventory levels have now worked their way through the channels. Management guided 2024 revenues to be in the range of $87M to $90M (Y/Y growth in the range of 6.4% and 10.0%) and adjusted EBITDA to be between $13 and $15M – it is quite possible the company beats these expectations.”

In a research update to clients July 10, Uddin maintained his “Buy” rating and price target of $4.85 on THTX, implying a return of 131% at the time of publication.

The analyst thinks THTX will post an EPS loss of $0.02 on revenue of $89.0-million in fiscal 2024. He expects those numbers will improve to EPS of $0.03 on revenue of $94.0-million in fiscal 2025.