On Friday, Wells Fargo adjusted its financial outlook on Hyperfine Inc. (NASDAQ: HYPR), setting a new price target of $1.60, decreased from the previous $2.10. The firm maintained its Equal Weight rating on the stock.
The revision follows Hyperfine's fourth-quarter results, which showed revenue falling short of expectations, although earnings per share (EPS) surpassed estimates. The company's forecast for 2024 revealed revenues projected to be between $12 million and $15 million, with an anticipated cash burn of $40 million.
The analyst at Wells Fargo noted that the updated revenue target for 2024 was reduced by $5.4 million to $13.1 million, aligning with the company's guidance. The EPS estimate was also revised, showing a lower expected loss of $0.55 per share compared to the previously projected loss of $0.67 per share. This change was attributed primarily to reduced operational expenditure estimates.
Hyperfine's new stock price target of $1.60 is based on approximately 2.5 times the firm's adjusted sales forecast for 2025, which now stands at $16 million. This valuation multiple remains unchanged despite the reduced sales estimate. The company's forward-looking statements included a revenue range that falls below Wall Street's earlier projections, prompting the financial institution to update its figures accordingly.
The company's recent quarterly performance, combined with its future guidance, has led to the revised financial metrics. Wells Fargo's analysis reflects a cautious outlook on Hyperfine's revenue and EPS, considering the company's operational spending and market expectations. The Equal Weight rating suggests that the firm views the stock as adequately valued at the current price, factoring in the new estimates.
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