Raymond James Cuts Price Target On AngioDynamics

Raymond James lowered the price target on AngioDynamics Inc ANGO to $27 from $32 based on a 3.0x group multiple applied to the C23 revenue estimate.
At 2.2x EV/sales, Raymond James believes ANGO is undervalued given its growth profile and expects the multiple to expand with continued execution, supporting the Strong Buy rating.
The revenue momentum is real and will carry into F23 (guide of 8-10% growth), the analyst wrote. He views back-order fulfillment as a source of cushion in the guidance. The stock price reaction is a bit disappointing given the guidance.
Related: AngioDynamics' Q4 Top-Line Beats Street View, Issues Mixed FY23 Guidance.
The analyst notes that hospital staff shortages are still an issue but likely did not curb revenue growth. Monthly volumes were similar throughout the quarter.
ANGO feels comfortable with the demand profile, even in a recessionary environment.
ANGO reduced the back-order to $8 million (from $11 million). This backlog may have some double-counting, but it's not significant (~10%). The company's anti-competitive lawsuit against Bard has been pushed to mid-September from early July, with low expectations.
Price Action: ANGO shares are up 5.74% at $21.17 during the market session on the last check Wednesday.

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