William Blair downgraded AxoGen (NASDAQ:AXGN) to “market perform” from “outperform” after the company reduced revenue guidance for 2019. The stock closed at $17.58 on Aug. 6, near the low end of its 52-week range of $14 and $46.
AxoGen is a human tissue company, making products to remedy peripheral nerve damage. The company uses a cell graft technology, AVANCE, to mimic a human nerve.
Analyst Brian Weinstein writes that while reporting meeting consensus for the second straight quarter, the company reduced its revenue guidance to a range of $106-million to $110-million, with $108-million at the midpoint, from an earlier forecast of $109-million to $114-million, or $111.5-million at the midpoint.
He said this now reflects an expectation for growth of between 26% and 31%, compared with a prior growth target of 30% to 36%.
“The issue driving the lower growth is delayed productivity growth, which has taken place over the first half of the year as the team undergoes a massive expansion in its sales force while also changing out its sales and commercial leadership,” Mr. Weinstein said.
“To account for the lower sales rep productivity and even though results were looking to come in at the lower end of the prior full-year guidance range, AxoGen decided to give itself a little more room for the rest of the year and took down expectations,” he added.