Cerus gains as Craig Hallum launches at Buy on return to growth

Following three sessions of back-to-back losses, Cerus (NASDAQ:CERS) shares traded higher after Craig Hallum initiated its coverage with a Buy recommendation, expecting the blood products company to return to growth in 2024.

Analyst Bill Bonello pointed out that after five consecutive years of growth exceeding 20%, Cerus’ (CERS) product revenue fell ~4% in 2023.

“We view the 2023 decline as an anomaly since many U.S. blood centers reduced INTERCEPT kit inventories relative to prior periods,” Bonello wrote, referring to the company’s main revenue generator.

“We believe that blood center inventories have stabilized, which should lead to a rebound in kit growth,” the analyst added as he argued that underlying demand for INTERCEPT remained intact and only supply chain issues had led to a decline in investors.

According to Bill, the stock has lost more than 50% since 2022-end amid revised estimates and multiple contractions, trading at 2x in terms of 2025 product revenue with a sharp discount to the historical average of more than x5.

Craig Hallum projects CERS’ product revenue to grow ~11% in 2024 and 2025, and issues a 12-month price target of $5 on the stock, indicating an EV multiple of 5x on its 2025 product revenue.