Analyst Bullish On Penumbra: Says Its Is Poised For Strong Revenue Growth With Multiple Upside Catalysts

Baird initiated coverage on Penumbra Inc PEN with an Outperform rating and a price target of $375.

The analyst notes that Penumbra, a pioneer in aspiration mechanical thrombectomy (MT), is set for robust revenue growth over the next 2-3 years, supported by various factors. 

Their proprietary computer-orchestrated FLASH (venous) and BOLT (arterial) MT systems, launched in 2023, drive growth acceleration by converting lytic-based therapies, gaining market share from existing MT procedures, and increasing revenue per procedure. 

The THUNDERBOLT system in the neuro segment is expected to follow a similar adoption trajectory.

Penumbra has identified multiple large and underpenetrated addressable market opportunities in vascular and neuro segments. 

The core venous thromboembolism (VTE) market is estimated at ~$2.7 billion for pulmonary embolism (PE) and ~$3 billion for deep vein thrombosis (DVT), with MT only 7% and 8% penetrated in their respective market opportunities. 

The acute ischemic stroke (AIS) market in the neuro segment represents an annual opportunity of nearly $1 billion, with only about 30% penetration.

The company's ongoing clinical trials hold the potential to accelerate MT adoption and expand the addressable markets in both vascular and neurovascular areas. 

In VTE, trials comparing MT to traditional catheter-directed thrombolysis and conservative medical management are expected to support MT category adoption. 

Baird analyst says Penumbra is one of the few profitable, DD ~$1 billion top-line growth MedTech companies, and a premium multiple is warranted given high conviction in revenue/profit upside over the next 2-3 years.

Price Action: PEN shares are down 3.58% at $303.29 on the last check Wednesday.