In a report released yesterday, Anthony Petrone from Mizuho Securities maintained a Buy rating on MiMedx Group (MDXG – Research Report), with a price target of $14.00.
Anthony Petrone has given his Buy rating due to a combination of factors related to MiMedx Group’s recent performance and future prospects. The company demonstrated a significant beat in its top-line revenue and adjusted EBITDA, attributed to strong growth in its core Woundcare segment, particularly in the US physician office channel, and contributions from new products. Despite the robust performance and unchanged full-year double-digit growth guidance, Petrone sees further upside potential, notably with the possibility of a favorable final Local Coverage Determination (LCD) ruling, which could provide a substantial boost to the company’s business.
Petrone’s positive outlook is reinforced by the fact that MiMedx’s core Woundcare brands are well-positioned in the proposed LCD ruling, creating a potential tailwind as a large portion of skin substitute products might not meet the sufficient evidence criteria. This scenario, along with the company’s strong underlying utilization trends and share gains, positions MiMedx to capture a significant market opportunity. Moreover, Petrone expects adjustments to the company’s estimates considering the ongoing improvements in its core business, notwithstanding some conservative assumptions during the LCD comment period. He also notes that the company’s stock is trading at a discount, presenting an arbitrage-like opportunity, with substantial untapped upside as reimbursements become standardized.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MDXG in relation to earlier this year.
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MiMedx Group (MDXG) Company Description:
MiMedx Group, Inc. is an advanced wound care and an emerging therapeutic biologics company. It engages in developing and distributing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. The company processes the human placental tissue utilizing its proprietary PURION process methodology, among other processes, to produce allografts by employing aseptic processing techniques in addition to terminal sterilization. MiMedx Group was founded on July 30, 1985 and is headquartered in Marietta, GA.
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