On Friday, Oppenheimer changed its stance on AngioDynamics (NASDAQ: NASDAQ:ANGO), shifting from a neutral Perform rating to a more bullish Outperform. The firm also set a price target for the medical device company's shares at $12.00. This upgrade comes in the wake of a series of positive developments for AngioDynamics, including a significant regulatory approval and strategic divestitures.
The upgrade was primarily motivated by the Food and Drug Administration's (FDA) earlier-than-anticipated approval to extend the use of AngioDynamics' AlphaVac system for treating pulmonary embolism (PE). This expanded indication is expected to serve as a new growth driver for the company. Additionally, AngioDynamics is preparing to present results from its pivotal PE trial in the coming months, which could further underscore the clinical value of AlphaVac.
AngioDynamics has also completed the sale of two non-core assets, which has substantially strengthened its financial position. These divestitures have provided the company with a more robust balance sheet, enabling more focused investments in its main product lines and potential future innovations.
This week marked another positive turn of events for AngioDynamics, as it saw the resolution of a patent litigation issue with Becton Dickinson (NYSE:BDX), removing what Oppenheimer referred to as an "overhang" on the company.
While acknowledging that AngioDynamics operates in a competitive market and that efforts to expand gross margins will take time to reflect in the profit and loss statement, the analyst firm sees the resolution as a relief that could clear the way for smoother operations.
The report from Oppenheimer suggests that, despite the competitive environment, AngioDynamics is well-positioned for growth. With the AlphaVac system now poised to contribute to the company's performance, and the potential for further indication expansions for its NanoKnife and Auryon products in deep vein thrombosis (DVT) treatment, the firm sees additional upside opportunities.
AngioDynamics' valuation, currently at less than one time its expected fiscal year 2025 enterprise value to sales, was also a factor in the upgrade to Outperform.
InvestingPro Insights
As AngioDynamics (NASDAQ: ANGO) garners a favorable outlook from Oppenheimer, InvestingPro data and tips provide a deeper dive into the company's financial health and market performance. AngioDynamics holds a market capitalization of $255.07 million, reflecting its size and market value in the medical device sector. Despite the challenges, the company has managed to achieve a high gross profit margin of 50.17% over the last twelve months as of Q3 2024, showcasing its ability to retain a significant portion of sales revenue after accounting for the cost of goods sold.
In the same period, AngioDynamics has experienced a revenue decline of 3.19%, which aligns with the analysts' anticipation of a sales decline in the current year. Moreover, the company has not been profitable over the last twelve months, with a negative P/E ratio of -1.25. This is further emphasized by an adjusted P/E ratio of -5.96, indicating that earnings have not kept pace with the share price.
On a more positive note, AngioDynamics has demonstrated significant returns for investors in the short term, with a one-week price total return of 9.03% and a one-month price total return of 13.88%. This suggests that recent events, including regulatory approvals and strategic divestitures, may have positively influenced investor sentiment.
InvestingPro Tips highlight that AngioDynamics holds more cash than debt on its balance sheet, a sign of financial stability, and has liquid assets that exceed short-term obligations, suggesting a solid position to meet immediate financial needs. Furthermore, the company is trading at a low revenue valuation multiple, which could indicate a potential undervaluation in the market. For investors seeking a comprehensive analysis, InvestingPro offers additional insights, including 10 more tips on AngioDynamics, which can be accessed through the platform. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more value to their investment research.
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