JMP Securities resumed coverage of Cardiovascular Systems (NASDAQ:CSII) with a “market outperform” rating and $35 price target. The stock closed at $24.11 on Thursday.
Cardiovascular is a medical technology company with a novel platform for eliminating vessel calcification, strong reimbursement, solid clinical evidence, and large, untapped markets.
Analyst John Gillings writes that his $35 price target is based on a multiple of about five times enterprise value/sales on estimated revenue of $220-million for 2017.
Once a well-regarded, high-flyer in the space, the company encountered a confluence of headwinds that weighed on sales and shook investor confidence, driving down the shares, he said.
“We believe Cardiovascular has turned the corner operationally, having posted sequential growth for each of the last two quarters, including an about 42% sequential increase in revenue per rep in the most recent quarter,” he added.
While the stock price has moved up meaningfully since dipping below $8 in February, he said the shares remain “significantly undervalued, in our view, given the large, untapped opportunities that lay ahead and our belief that the many challenges that drove them down are now firmly in the past.”
