Vericel (VCEL – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Samuel Brodovsky from Truist Financial remains neutral on the stock and has a $39.00 price target.
Samuel Brodovsky of Truist Financial has given Vericel a Hold rating due to several factors. Primarily, while Vericel did present a solid third-quarter result and there remains potential for NexoBrid, the upside appears to be more weighted towards the second half of 2024. Brodovsky believes that the company’s updated guidance suggests a slower NexoBrid ramp in 2024, which may limit immediate growth prospects. Furthermore, the analyst maintains a cautious stance as Vericel’s current growth is already reflected in its valuation, and greater visibility into a potential acceleration beyond 20% growth next year is required to justify a premium valuation for the company.
Brodovsky updated the price target for Vericel to $39 from $33, applying a ~7.5x EV/Sales multiple to the estimated 2024 revenue. He believes a premium valuation is justified given Vericel’s potential for revenue acceleration and superior margin profile compared to its peers. However, he suggests that greater visibility into a more significant revenue acceleration in 2024 and beyond is required to argue for an increased potential upside beyond the updated price target. Moreover, the analyst notes that while the third-quarter revenue beat expectations due to slight MACI upside and initial NexoBrid stocking revenue, the fourth-quarter NexoBrid revenue is expected to mirror the third quarter. Hence, the Hold rating reflects a measured approach towards Vericel’s future growth prospects.
VCEL’s price has also changed slightly for the past six months – from $33.000 to $35.270, which is a 6.88% increase.
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Vericel (VCEL) Company Description:
Vericel Corp. engages in the research, product development, manufacture, and distribution of patient-specific, expanded cellular therapies for use in the treatment of patients with diseases. Its product portfolio includes MACI and Epicel. The MACI portfolio is FDA-approved product that applies the process of tissue engineering to grow cells on scaffolds using healthy cartilage tissue from the patient’s own knee. The Epicel portfolio provide skin replacement for patients who have deep dermal or full thickness burns. The company was founded on March 24, 1989 and is headquartered in Cambridge, MA.
Read More on VCEL:
- Vericel Reports Third Quarter 2023 Financial Results and Raises Full-Year 2023 Financial Guidance
- Vericel raises 2023 revenue view $192.5M-$197.5M from $190M-$197M
- Vericel reports Q3 EPS (8c), consensus (12c)
- Vericel to Present at the Stephens Annual Investment Conference
- Is VCEL a Buy, Before Earnings?
