On Wednesday, Roth/MKM maintained a Buy rating on Biote Corp. (NASDAQ: BTMD) and increased the stock price target to $10 from the previous $9. The firm's decision followed Biote's first-quarter 2024 results, which surpassed expectations.
The analyst highlighted several key performance indicators that contributed to the positive outlook, including a sequential increase in procedure revenue, stable growth, and robust margins.
Biote Corp.'s recent financial results have shown a promising trend, with the company's procedure revenue showing a sequential improvement. This uptick has been accompanied by what appears to be a stabilization in the company's growth trajectory. Furthermore, Biote has managed to sustain strong profit margins, which have contributed to the analyst's favorable assessment of the stock.
The analyst also pointed out that the market has not fully recognized the value of Biote's significant share buyback program. The buyback, which is still underway, is expected to add value for shareholders and has been factored into the firm's analysis. This aspect of Biote's strategy is seen as a positive influence on the stock's valuation.
With the price target adjustment, Roth/MKM has based its $10 target on a 7.6 times multiple of Biote's forecasted FY25 EBITDA. The firm's valuation reflects a belief that the stock is currently undervalued, trading at approximately 5.0 times the projected 2025 EBITDA. This valuation also implies a greater than 20% free cash flow yield, further underscoring the stock's attractiveness from the analyst's perspective.
The updated stock price target and sustained Buy rating indicate Roth/MKM's confidence in Biote's financial health and future prospects. The firm's analysis suggests that Biote Corp. is positioned well for the coming year, with a stock price that is seen as inexpensive relative to its expected earnings before interest, taxes, depreciation, and amortization.
InvestingPro Insights
As Biote Corp. (NASDAQ: BTMD) continues to impress with its financial performance, real-time data from InvestingPro further supports the optimism surrounding the company. With a market capitalization of $366.09 million and a noteworthy revenue growth of 12.37% over the last twelve months as of Q4 2023, Biote's financial stability is evident. The company's gross profit margin stands strong at 68.78%, highlighting its ability to maintain profitability.
InvestingPro Tips suggest that Biote is expected to see net income growth this year, which aligns with the positive outlook from analysts. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, indicating that its stock could be undervalued. This is further substantiated by the fact that Biote has been profitable over the last twelve months and has experienced a significant price uptick of 45.34% over the last three months.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/BTMD. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. The insights provided by InvestingPro, combined with the latest financial data, can help investors make well-informed decisions regarding Biote Corp.'s stock.
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