On Tuesday, Truist Securities maintained a Buy rating on Procept BioRobotics Corp (NASDAQ: PRCT) and increased the price target to $105 from the previous $95. This adjustment follows Procept BioRobotics' strong performance in the third quarter, where the company exceeded expectations and raised future projections.
The analyst at Truist Securities highlighted the reasons for the optimistic outlook, noting a significant increase in the average selling price (ASP) of the company's systems. This increase in ASP is a key factor behind the raised revenue and profit forecasts, even before factoring in potential revenue from the HYDROS replacement or trade-in opportunities, which the analyst considers an additional upside that is not yet included in the model.
The company's third-quarter results showed a higher than anticipated system ASP and a gross margin improvement of 400 basis points. These factors contribute to the analyst's confidence in Procept BioRobotics' ability to continue its trajectory of above-average revenue growth, which is expected to be over 50%, and its scaling profit profile.
While Truist Securities is awaiting the company's 2025 guidance before including replacement revenue in their model, the analyst suggests that the numbers could illustrate significant future revenue streams. These streams have the potential to drive at least another 5-10% or more upside to the 2025-2026 revenue estimates.
In summary, the price target increase to $105 reflects the analyst's revised outlook based on rising outer-year estimates, underpinned by strong quarterly performance and the potential for additional revenue opportunities in the near future.
In other recent news, Procept BioRobotics has demonstrated significant financial growth. The company reported a robust 66% year-over-year increase in revenues for the third quarter of 2024, totaling approximately $58.4 million.
This success is largely attributed to the company's HYDROS units, which accounted for around 80% of system placements in the third quarter. In light of these positive results, Procept BioRobotics has revised its full-year 2024 guidance to a range of $222.5 million to $223.0 million, up from the previous forecast of $217.0 million.
In addition to these financial developments, Procept BioRobotics has initiated a public offering of common stock valued at $175 million, with BofA Securities, Piper Sandler, and Morgan Stanley serving as the joint book-running managers. The company also announced a new clinical trial for Aquablation therapy, further expanding its product offerings. Despite maintaining a Neutral rating from BTIG, these recent developments suggest a robust outlook for the company.
Lastly, it's worth noting that Procept BioRobotics is projecting revenues of around $66.5 million for the fourth quarter of 2024. This projection is based on a variety of factors, including an expected decline in handpiece utilization, which is anticipated to be offset by higher system average selling prices.
InvestingPro Insights
The recent analysis from Truist Securities aligns well with several key metrics and insights from InvestingPro. Procept BioRobotics Corp (NASDAQ: PRCT) has demonstrated remarkable market performance, with InvestingPro data showing a staggering 248.79% price total return over the past year. This exceptional growth is further emphasized by the company's 117.13% year-to-date price total return, reflecting the strong momentum mentioned in the analyst's report.
InvestingPro Tips highlight that PRCT is trading near its 52-week high, which corroborates the positive sentiment expressed in the Truist Securities analysis. The company's revenue growth of 73.74% over the last twelve months as of Q2 2024 supports the analyst's projection of continued above-average revenue growth exceeding 50%.
However, investors should note that according to InvestingPro Tips, analysts do not anticipate the company to be profitable this year, which aligns with the current focus on growth rather than immediate profitability. The company's high revenue valuation multiple suggests that market expectations are high, reflecting the optimism surrounding its future prospects.
For those seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for PRCT, providing a deeper understanding of the company's financial health and market position.
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