Vericel’s Strong Q1 Performance and Growth Potential Affirm Buy Rating

Leerink Partners analyst Mike Kratky reiterated a Buy rating on Vericel (VCEL – Research Report) on May 8 and set a price target of $57.00.

Mike Kratky has given his Buy rating due to a combination of factors including Vericel’s impressive financial performance in the first quarter of 2024, and the strong growth potential looking forward. Vericel’s first quarter results showcased robust growth in MACI revenue, with an 18% year-over-year increase, which speaks to the expansion of the surgeon base and a surge in biopsies. Additionally, the company’s gross margins exceeded expectations, contributing to an upward revision of the full-year guidance that now surpasses consensus estimates. This indicates a trajectory for sustained profitability and operational efficiency, bolstering investor confidence in the company’s fiscal health.

Furthermore, the anticipated approval of arthroscopic MACI in the third quarter of 2024 presents a significant growth opportunity for Vericel, which Kratky believes is not yet fully appreciated by the market. The company’s conservative guidance on gross and Adjusted EBITDA margins seems prudent, especially when considering the high incremental gross margin achieved in the first quarter. All these factors, combined with the strong operating leverage demonstrated, suggest that Vericel is well-positioned for continued execution and growth, supporting Kratky’s optimistic outlook and the Buy rating for the stock.

Kratky covers the Healthcare sector, focusing on stocks such as Intuitive Surgical, Inspire Medical Systems, and Tandem Diabetes Care. According to TipRanks, Kratky has an average return of 12.3% and a 50.00% success rate on recommended stocks.

In another report released yesterday, Ladenburg Thalmann & Co. also maintained a Buy rating on the stock with a $53.00 price target.

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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.