Agile Therapeutics (NASDAQ: AGRX) Upgraded To "Buy" Rating By Analysts At Maxim Group

Maxim Group, a major investment bank, conducts and publishes stock analysis through its Equity Research team. The team has a strong reputation in the industry; a host of major firms use its research. The firm’s focus and area of expertise is in small and micro-cap companies, some of which are poised for growth. In a recent report, the research team at Maxim Group outlined why it has upgraded Agile Therapuetics Inc. AGRX to a “buy” rating.

Agile Therapeutics is a women’s healthcare company that is “dedicated to fulfilling the unmet needs of today’s women.” Its product and product candidates are designed to offer women more freedom and flexibility through additional contraceptive options. The company’s lead product, Twirla®, is a weekly birth control patch. Twirla delivers its medicine through skin contact, eliminating the need for a daily pill. 

Maxim Group has changed its recommendation for the stock to buy, explaining that “fundamental metrics and/or identifiable catalysts exist such that we expect the stock to outperform its relevant index over the next 12 months”. The report sets a one-year price target of $5, a nearly 180% increase from its current level.

The report names several key factors in the decision:

• “Twirla has been experiencing accelerating total prescriptions (TRx) and demand growth, putting the company at an inflection point, in our view. Twirla sales accelerated significantly in 2Q23 and we expect this trajectory to continue, along with gross margin expansion.”
• “The recently-activated Nurx (private) partnership significantly expands its retail channel presence. However, The initial Nurx rollout has been slower than expected, but we expect significant sales acceleration and margin expansion driven by Nurx in 2024.”
• “We initially viewed 2023 revenue guidance of $25M-$30M, up 130%-175% y/y as aggressive due to the sales ramp required from the beginning of 2023, but as the script and sales data continue to build, we are now optimistic that Agile can achieve guidance. Consequently, we are increasing our 2023 revenue estimate to $25.3M ($22.8M prior) and 2024 estimate to $42.9M ($34.4M prior) due to script acceleration. In addition, we expect gross margins to expand to 70% in 4Q23, from 47% in 1Q23.”
• “There is a financing overhang, but given the sales and script trajectory, we believe the company can adequately access capital to get to breakeven, which could come by 1H24. If the company reaches the higher end of guidance, breakeven (and profitability) can be achieved sooner.”
• “We believe the narrative surrounding the stock will change as confidence increases that profitability is approaching. As such, we are upgrading our rating to Buy, from Hold, and establishing a 12-month price target of $5.00.”

Analysis recommendations should always be read with caution, and it is important to note that Maxim may make a market for Agile and may stand to profit from the company. That being said, the analysis speaks for itself and may be a valuable addition to an investor's stream of information when making stock picks.

Featured photo by Nicholas Cappello on Unsplash.

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