On Wednesday, Needham reaffirmed its Buy rating and $2.50 price target on Lucid (NASDAQ:LCID) Diagnostics Inc (NASDAQ:LUCD). The firm acknowledged the company's performance in the third quarter of 2024, noting an 8% year-over-year increase in EsoGuard test volume to 2,787 tests. Lucid Diagnostics exceeded consensus revenue expectations for the quarter despite a moderated growth in test volume and sales-force expansion pending Medicare coverage.
The company's operating expenses for the quarter were higher than Needham's estimates. At the close of the third quarter, Lucid Diagnostics reported approximately $28 million in pro forma cash. This includes an anticipated $13 million raised in November.
Needham anticipates an improvement in Lucid Diagnostics' revenue growth as the company begins to process claims and collect payments. Looking ahead, the firm expects that Lucid Diagnostics will see a reacceleration in EsoGuard test volume growth after securing Medicare and other insurers' coverage. The continued support from Needham reflects a positive outlook on the company's financial health and market position.
In other recent news, Lucid Diagnostics, a subsidiary of PAVmed (NASDAQ:PAVM), has reported a significant 500% year-over-year increase in revenue for the second quarter of 2024, reaching $1 million. The company also saw a substantial rise in the volume of EsoGuard tests, marking a 31% sequential increase and a 44% year-over-year growth.
In a strategic move, PAVmed has deconsolidated Lucid Diagnostics from its financial statements, however, PAVmed remains Lucid's largest shareholder. Lucid Diagnostics has also maintained its Buy rating from BTIG, with the firm's confidence stemming from potential Medicare coverage.
In a bid to increase early detection of esophageal cancer in firefighters, Lucid Diagnostics has partnered with Front Line Mobile Health, leveraging Lucid's EsoGuard Esophageal DNA test. Lucid Diagnostics is actively working to secure broad coverage and reimbursement for EsoGuard, despite a decrease in payment rate due to medically unnecessary claims and a backlog of $12.5 million in claims. The company also published a study confirming the analytical accuracy of its EsoGuard test in diagnosing esophageal precancer and cancer, with an accuracy rate of 96%.
Lucid Diagnostics has expanded its direct contracting initiative to increase revenue for its EsoGuard Esophageal DNA Test. This expansion includes fully-contracted precancer testing events, concierge medicine, and employer markets. Lucid has recently hired two industry experts from GRAIL, Inc. to support these efforts.
InvestingPro Insights
Lucid Diagnostics Inc (NASDAQ:LUCD) presents a mixed financial picture that aligns with Needham's analysis. According to InvestingPro data, the company's revenue growth is impressive, with a 513.84% increase in quarterly revenue as of Q2 2024. This robust growth supports Needham's expectation of improved revenue performance as Lucid begins processing claims and collecting payments.
However, investors should note that Lucid is currently not profitable, with a negative gross profit margin of -67.39% over the last twelve months. This aligns with the InvestingPro Tip that the company "suffers from weak gross profit margins." Despite this, Lucid holds more cash than debt on its balance sheet, which could provide some financial flexibility as it works towards profitability.
The market seems to be recognizing Lucid's potential, as evidenced by the strong returns over the last month (27.65%) and three months (16.28%). This positive momentum may reflect investor optimism about the company's future, particularly if Medicare coverage is secured as Needham anticipates.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Lucid Diagnostics, providing a deeper understanding of the company's financial health and market position.
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