On Monday, Jefferies adjusted its stock price target for scPharmaceuticals (NASDAQ:SCPH), a pharmaceutical company, reducing it to $13 from the previous $16. Currently trading at $3.54, the stock has declined 42% year-to-date. The firm sustained its Buy rating on the stock, suggesting continued confidence in the long-term prospects of the company.
According to InvestingPro data, analyst targets for SCPH range from $12 to $25, indicating significant potential upside. The revision follows the company's third-quarter results, which prompted an update to the firm's financial model.
The analyst from Jefferies indicated that scPharmaceuticals is making progress in several key areas, including the launch of Furoscix, its product pipeline, and its financial positioning. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 8.08 and holds more cash than debt on its balance sheet.
The positive developments across these areas contribute to the firm's ongoing bullish stance on the company's long-term outlook, despite rapid cash burn being flagged as a concern by InvestingPro analysts.
Despite the price target reduction, Jefferies anticipates that scPharmaceuticals will demonstrate effective execution in the upcoming quarters, particularly as Furoscix, a treatment for heart failure patients, continues to gain market acceptance. The firm expects that the current undervaluation of scPharmaceuticals' shares will correct over time as the company continues to deliver on its strategic initiatives.
While the price target has been lowered, the maintained Buy rating suggests that Jefferies sees potential for scPharmaceuticals' stock value to grow, banking on the company's strategic progress and market execution. The company has demonstrated impressive revenue growth of 304% over the last twelve months, though InvestingPro analysis indicates it remains unprofitable.
For deeper insights into SCPH's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 8 additional ProTips and extensive financial metrics.
In other recent news, scPharmaceuticals reported a 24% rise in net revenue for the third quarter of 2024, amounting to $10 million. This growth is primarily due to the expansion of the sales force and a broader indication for FUROSCIX, now including Class IV heart failure patients.
Despite a net loss of $35.1 million for the quarter, the company's cash reserves rose to $91.5 million, following a significant financing round completed in August 2024.
Simultaneously, scPharmaceuticals is anticipating FDA approval for FUROSCIX to treat edema in chronic kidney disease patients, with a Prescription Drug User Fee Act (PDUFA) date set for March 6, 2025. The company's management is also optimistic about increased sales during the upcoming holiday season and expects significant adoption of an autoinjector, projecting over 90% of FUROSCIX prescriptions to use this method.
However, the company experienced a higher net loss compared to the same quarter in the previous year, primarily due to one-time charges. The gross-to-net (GTN) discount for FUROSCIX exceeded anticipated ranges, resulting in revenue loss. Despite these challenges, the company's strategic initiatives are expected to drive growth into the next year.
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