Buy Rating Upheld for AxoGen Amid Strong Financials and Innovative Growth Strategy

JMP Securities analyst David Turkaly reiterated a Buy rating on AxoGen (AXGN – Research Report) today and set a price target of $17.00.

David Turkaly’s rating is based on a confluence of positive aspects surrounding AxoGen’s recent performance and future prospects. The company’s first quarter results for 2024 were slightly below expectations, with revenues at $41.4 million, yet AxoGen maintained its full-year sales guidance, indicating a stable outlook. Additionally, the company demonstrated a strong adjusted EBITDA, outperforming consensus estimates, which suggests solid underlying financial health. Turkaly also notes the ongoing search for a new CEO, indicating potential for strategic leadership to drive future growth.

Turkaly’s bullish stance is underpinned by AxoGen’s innovative product offerings, such as the AxoGuard HA+ nerve protector and Avive+ resorbable soft tissue matrix, that cater to a significant market with limited biological competition. The company’s growth strategy, which focuses on deepening relationships in high-potential accounts, is reflected in the increase of core accounts and stable sales representative numbers, signaling effective market penetration and salesforce productivity. Furthermore, positive outcomes from clinical trials, such as the RECON BLA trial, are expected to bolster product uptake. Turkaly’s $17 price target is justified with an estimated valuation of approximately 4 times the projected 2025 revenue, reinforcing his Buy recommendation for AxoGen’s stock.

In another report released on May 2, Leerink Partners also reiterated a Buy rating on the stock with a $14.00 price target.

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AxoGen (AXGN) Company Description:

AxoGen, Inc. engages in the development and market of surgical solutions for peripheral nerves. It also provides products and education to improve surgical treatment algorithms for peripheral nerve damage or discontinuity. Its products include avance nerve graft, axoguard nerve connector, axoguard nerve protector, avive soft tissue membrane, acroval neurosensory and motor testing system, and axotouch two-point discriminator. The company was founded in 1977 and is headquartered in Alachua, FL.