Analysts Cut Price Target On Aziyo Biologics As Q4 Earnings Fall Short Of Expectations

Aziyo Biologics Inc AZYO Q4 FY21 sales decreased 13% to $10.9 million, missing the consensus of $11.06 million.
Excluding the contribution of FiberCel sales, which the product's distributor discontinued in Q2 of 2021, Q4 sales increased 6% Y/Y.
The 510(k) application for CanGaroo RM, the Company's next-generation envelope, remains on track for submission by the end of Q1 of 2022, with a commercial launch expected in 2H 2022.
The adjusted gross margin was 39%, down from 55.1% a year ago, due to increased reserves for excess inventories in the Company's human tissue business.
The Company posted a Q4 EPS loss of $(0.82), missing the consensus of $(0.57).
Guidance: Aziyo expects FY22 sales of $47 million - $50 million, below the consensus of $52.37 million.
Analyst Reaction: Piper Sandler has lowered the price target to $9 from $11, with an Overweight rating.
The Company is facing headwinds over the near term as it laps the recall of FiberCel, writes analyst Matt O'Brien. The analyst also notes that catalysts such as RM510k clearance for CanGaroo RM by the end of this month could be a big growth driver.
Cowen cut its price target from $15 to $13, with an Outperform rating unchanged. The analyst said a major upcoming catalyst is the FDA clearance of CanGaroo RM.
Price Action: AZYO closed 10.3% lower at $6.00 on Thursday.