On Tuesday, BTIG reaffirmed its Buy rating on Exagen (NASDAQ:XGN) with a steady price target of $5.00. The decision followed Exagen's third-quarter results, which aligned with forecasts on an adjusted basis but fell slightly short on a reported basis due to one-time adjustments that are not expected to be repeated.
Exagen reported a 26% year-over-year increase in average selling prices (ASPs) for the third quarter. The company also anticipates reaching cash flow positivity in the fourth quarter of 2025. Despite a minor reduction in its 2024 revenue guidance, now set at $55-56 million, reflecting a 5-7% year-over-year growth, this adjustment is seen as negligible by BTIG.
The lowered revenue forecast for 2024 accounts for the impact of the one-time adjustments. Exagen's new product launches, scheduled for later in 2024, are projected to contribute to higher ASPs in 2025. John Aballi, the company's CEO, has been recognized for his effective management, improving top-line growth and gross margin while reducing operating expenses.
Exagen's stock currently trades at approximately 0.7 times BTIG's 2026 revenue estimate of $72 million. This valuation is considered well below the typical range of 3-7 times revenue seen among Exagen's peers and historical averages. The firm's reiteration of the Buy rating and $5 price target reflects confidence in the company's financial trajectory and market position.
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