Paragon 28 stock reaffirms Buy rating on revenue estimates

On Monday, Needham analysts maintained a Buy rating on shares of Paragon 28, Inc (NYSE: FNA), with a price target set at $13.00. Currently trading at $10.47, InvestingPro analysis indicates the stock is fairly valued.

The reaffirmation follows Paragon 28's preannouncement of its fourth-quarter 2024 revenue, which is expected to be between $71.5 million and $71.8 million. This figure represents an approximate 18-19% year-over-year increase, aligning with the company's strong trailing twelve-month revenue growth of 18.16%, and surpasses the consensus estimate of $69.6 million.

For the full year of 2024, Paragon 28 anticipates its revenue will fall within the range of $255.9 million to $256.2 million, marking a similar year-over-year growth of around 18%. The company maintains a strong financial position with a current ratio of 3.5, indicating robust liquidity.

Despite not providing revenue guidance for 2025, Needham analysts noted that the consensus estimate for 2025 revenue stands at $292 million, suggesting an estimated growth of 14%. The analysts expressed the opinion that this forecast could be conservative, considering the company's performance in 2024 and the successful launch of a series of new products during the same year. Discover more detailed financial metrics and analysis with InvestingPro, which offers comprehensive research reports for over 1,400 US stocks.

Needham's decision to reiterate their Buy rating comes with the intention to await the full announcement of Paragon 28's fourth-quarter 2024 results and its financial guidance for 2025 before updating their financial model. The analysts' current stance reflects their confidence in the company's continued momentum and growth potential.

Paragon 28's recent developments and the positive preannouncement of its fourth-quarter revenue underscore the company's upward trajectory in the market. Needham's analysts will be closely monitoring the upcoming detailed financial results and guidance to potentially adjust their assessments and expectations for the medical device company's future performance.

In other recent news, Paragon 28 reported a significant growth in its Q4 and full-year revenue. The company's global revenue reached a record $62.3 million in Q3, marking an 18.1% increase from the previous year. The U.S. market contributed $51.2 million, while international markets experienced a substantial 35.7% growth. The company also revealed improvements in operational efficiency, with a decrease in free cash flow usage and the first positive adjusted EBITDA since its IPO.

Paragon 28 has raised its full-year net revenue guidance for 2024 and launched 13 new products that are expected to contribute to future growth. The company is focused on achieving EBITDA positivity in 2025 and cash flow positivity in 2026. These recent developments indicate Paragon 28's commitment to continued growth and operational efficiency.

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