On Monday, Lake Street Capital Markets updated its financial outlook for shares of Profound Medical (TASE:PMCN) Corp. (NASDAQ:PROF), raising the price target to $17.00 from the previous $16.50, while reiterating a Buy rating on the stock. According to InvestingPro data, analyst targets for PROF range from $12 to $19, with the company showing strong revenue growth of 39.35% in the last twelve months.
The adjustment follows the company's third-quarter earnings, which presented a mix of outcomes and reaffirmed revenue projections for 2024 in the range of $11.0 million to $12.0 million. Despite the reaffirmation, the firm noted Profound Medical's target of 75 TULSA system installations by the end of the year might not be achieved.
The analyst from Lake Street Capital Markets highlighted the final TULSA reimbursement rates set by the Centers for Medicare & Medicaid Services (CMS), which are seen as exceptionally favorable. TULSA technology has become the only ablative technology across any type or indication to reach Ambulatory Payment Classification (APC) level 7, surpassing all other prostate cancer treatment modalities, which are at level 6.
The new reimbursement rates for TULSA are set to take effect on January 1st, which positions it advantageously over other prostate cancer treatments in terms of CMS support. This development is significant as it could influence hospital and clinic decisions favoring the adoption of the TULSA system, given its superior reimbursement status.
Furthermore, Lake Street pointed out the potential market impact of the newly announced TULSA+ offering, which is a collaboration with Siemens (ETR:SIEGn) for magnetic resonance imaging (MRI) systems. The analyst believes that the significance of this development could be underestimated by the market.
The integration with Siemens MRIs is expected to enhance the TULSA system's capabilities and appeal in the medical technology space. With projected revenue growth of 55% for FY2024, the company's market potential appears promising. Discover more detailed insights and 8 additional key ProTips for PROF through InvestingPro's comprehensive research report, part of its coverage of over 1,400 US stocks.
In other recent news, Profound Medical Corp reported a 64% surge in revenue, reaching $2.83 million in the third quarter of 2024. This significant revenue increase was largely driven by recurring revenue, which accounted for $2.65 million.
Despite the growth, the company recorded a net loss due to a 42% rise in operating expenses. The company's TULSA procedure received positive feedback, and the firm anticipates growth due to upcoming reimbursement changes and clinical trial progress.
The company's full-year revenue for 2024 is projected to be between $11 million and $12 million. The firm is also planning to install 75 TULSA systems by early next year. However, it is worth noting that the company is expecting a net loss of $9.4 million due to increased operating costs. The CAPTAIN clinical trial is currently underway, with the Cleveland Clinic as a new site. The trial's results are crucial for gaining commercial insurance reimbursements.
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