Oppenheimer Initiating Coverage On Endologix (ELGX)

Oppenheimer is initiating coverage on Endologix, Inc. ELGX with an Outperform rating and a $10 price target on shares. In a note sent to clients, Oppenheimer writes, "We are initiating coverage of ELGX with an Outperform rating and $10 PT. ELGX is an emerging player in the device treatment of abdominal aortic aneurysms (AAA). With products advancing the technological frontier in AAA, we believe ELGX is first-in-line to win the delta as the market expands to new patient populations. We like ELGX's leading pipeline of premium products, supportive market dynamics, solid gross margin, and building salesforce. At 3.8x '11E EV/sales, ELGX trades at a premium to small cap peers. With sales growth acceleration and several market-expanding pipeline launches expected over the next couple of years, we believe a premium valuation is warranted. Our $10 PT is driven by DCF and implies a 4.5x '12E EV/sales." Shares of ELGX closed at $6.65 yesterday.