ThinkEquity starts Novadaq at buy
ThinkEquity has initiated coverage of Novadaq Technologies (NASDAQ:NVDQ; TSX:NDQ) with a “buy” rating and $11 price target. The stock closed at $6.76 on Monday.
“We view Novadaq’s SPY Imaging technology platform to be an innovation that addresses currently unmet medical needs in the field of open and minimally invasive surgery (MIS),” writes analyst Spencer Nam.
“With four sales and distribution partnerships with major US medical device companies, we expect Novadaq’s revenues to ramp up rapidly once it launches its own solution for MIS in 2012,” he added.
Novadaq’s partnerships with Intuitive Surgical, KCI, LifeCell and MAQUET were all signed within 24 months of each other, which indicates “how attractive the established medical technology companies view the SPY Imaging technology,” Mr. Nam said.
“We expect Novadaq’s upcoming direct launch of its PINPOINT endoscope in 2012 to impact the market significantly, and the technology could turn into a must-have for general surgeons,” he added.
Mr. Nam predicted Novadaq’s annual revenue could grow to $118.6 million in 2016 from $15.6 million in 2011, which “could represent some of the fastest potential revenue growth in the entire medical devices sector.” He also suggested that Novadaq could become profitable in 2013.
“We believe our price target of $11 could be conservative” he said, adding that he “wouldn’t be surprised if our target were reached in the next six to nine months.”