Zinger Key Points
- The analyst is optimistic about Orthofix Medical's unique offerings and plans for ongoing innovation.
- 7D and ortho sub-segments are in Orthofix Medical's highest growing markets.
Canaccord Genuity initiated coverage on Orthofix Medical OFIX, a medical device company focused on the development, manufacture and commercialization of technology for the surgical treatment of spinal and broader orthopedic disorders.
Canaccord Genuity analyst Caitlin Cronin writes that over two years have passed since Orthofix merged with SeaSpine. With a new management team in place since early 2024, the company has successfully integrated the two teams and portfolios.
It is now ready to move forward with its long-term plan and unified strategy. The analyst is optimistic about Orthofix Medical’s unique offerings and plans for ongoing innovation, using its entire portfolio to drive growth across its various segments.
This cohesion is helping Orthofix Medical not only aim for above-market growth but also focus on cash generation and improve profit margins.
Canaccord Genuity has initiated with a Buy rating and a price forecast of $24.
The analyst Cronin adds that both 7D and ortho sub-segments are in Orthofix Medical’s highest growing markets, with the company estimating market growth of 10-12% in enabling tech and 5-6% in its ortho segment.
Overall, the company is targeting profitable growth. Additionally, Orthofix Medical’s current valuation appears attractive, trading well below the average of its small-cap and spine industry peers.
Third quarter 2024 net sales increased 7% year-over-year to $196.6 million, with 18% growth in U.S. Spine Fixation net sales driven by distribution expansion and further penetration in existing accounts, 9% growth in Bone Growth Therapies net sales and 13% growth in BGT Fracture net sales.
The company expects 2024 sales of $795 million-$800 million compared to the consensus of $796.6 million.
The company sees adjusted EBITDA guidance of $64 million to $69 million and expects positive free cash flow for the second half of 2024.
Price Action: OFIX stock is down 0.05% at $18.35 at last check Wednesday.
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