IRhythm Technologies Is Breaking Ground In Cardiac Monitoring, Says New Sell-Side Bull

Medtech name IRhythm Technologies Inc IRTC is redefining how cardiac arrhythmias are monitored, which makes the stock an attractive buy, according to BMO Capital Markets. 

The Analyst

BMO analyst Joanne Wuensch initiated coverage of iRhythm Technologies' stock with an Outperform rating and $76 price target.

The Thesis

IRhythm's core wireless ZIO XT stands out from competing products and is a differentiated platform for four key reasons, Wuensch said in the initiation note:

• The wearable ZIO Patch bionsensor records and stores ECG data from every heartbeat for up to 14 days.
• The company's cloud-based analysis of cardiac rhythms is combined with a proprietary algorithm.
• A final quality assessment review of the data is included.
• A report is sent directly to the patient's physician and is integrated into an electronic health record.

IRhythm should be able to grow its full 2018 revenue by 32.9 percent over the prior year to $130.9 million, Wuensch said. In 2019, revenue should grow another 35.1 percent and then 29.4 percent in 2020, yielding a compounded annual growth rate of 37.5 percent through 2020, the analyst said.

An expansion of the company's sales force from 86 people to as many as 112 makes the revenue momentum possible, she said. 

IRhythm boasts a superior revenue growth rate versus the peer group's 20 percent, and it faces a very large and mostly underpenetrated market opportunity in arrhythmia monitoring, according to BMO. 

Price Action

Shares of iRhythm Technologies were trading higher by 0.53 percent midday Tuesday. 

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