On Tuesday, Piper Sandler adjusted its outlook on Shockwave Medical (NASDAQ:SWAV), increasing the price target to $360 from the previous $290, while keeping an Overweight rating on the stock.
The revision follows recent developments at Shockwave Medical, including the U.S. Food and Drug Administration's (FDA) approval of its new peripheral below-the-knee (BTK) device, as well as the ahead-of-schedule completion of enrollment for the company's FORWARD PAD IDE study concerning the Javelin device.
Shockwave Medical's latest FDA-approved E8 device and the progress with the Javelin study are significant because they enable the treatment of additional patient anatomy BTK. These advancements are expected to contribute to an acceleration of the intravascular lithotripsy (IVL) segment's growth in the years 2025-2026. The BTK market has been a focal point for Shockwave Medical since its initial public offering in 2019, although the adoption rate has not met initial expectations, partly due to specific challenges with the devices.
The firm conducted a detailed review of the market forecasts for BTK treatments and re-evaluated the potential impact of Shockwave Medical's new products on the company's financial models for the medium to long term.
"Our illustrative modeling exercise leads us to believe that Street models (including ours) may be under-modeling the impact of these product launches and that BTK could be a source of upside," said the analysts.
InvestingPro Insights
As Shockwave Medical (NASDAQ:SWAV) garners positive attention with its recent FDA approval and study completions, InvestingPro data provides a deeper financial perspective on the company. With a robust market capitalization of $11.99 billion and a gross profit margin of an impressive 86.94% over the last twelve months as of Q1 2023, Shockwave Medical demonstrates strong profitability. However, investors should note the high earnings multiple, with a P/E ratio of 80.03, suggesting a premium market valuation.
InvestingPro Tips indicate that while the stock is trading near its 52-week high, with a price 96.66% of this peak, the RSI suggests the stock is in overbought territory. Additionally, the company operates with a moderate level of debt and has liquid assets that exceed short-term obligations, providing financial stability. For those interested in further insights, there are 17 additional InvestingPro Tips available, which can be explored with a subscription that includes an extra 10% off using the promo code PRONEWS24.
With anticipated growth in the intravascular lithotripsy segment, these financial metrics and expert tips can help investors make informed decisions about Shockwave Medical's future in the market.
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