Raymond James upgraded Profound Medical (TSX:PRN; NADAQ:PROF) to “strong buy” from “outperform” and raised its price target to $45 (Canadian) from $35, selecting Profound as its “2020 Best Pick.”
Shares of Profound closed at $15.81 on Jan. 28 but were quoted at $17.95, up $2.14, in early trading on Jan. 29.
Analyst Rahul Sarugaser writes that medical device companies in the early stages of rapid commercial ramp-up programs generally garner valuations of 10 times to 20 times revenue, implying that Profound could be valued at $600-million to $1.2-billion in two years.
“As such, short-term focused investors may wish to look elsewhere, while, for long-term/value investors, we believe Profound represents an extremely attractive investment proposition,” Mr. Sarugaser said.
Profound is rolling out its TULSA-PRO transurethral prostate tissue ablation system, which is designed to provide customizable and predictable, incision-free and radiation-free prostate ablation, while actively protecting the urethra and rectum with water cooling to preserve men’s functional abilities.
Mr. Sarugaser said Profound most recent financing should be the last equity raise it will require to fully commercialize TULSA-PRO.
