Stifel launched coverage of SeaSpine Holdings (NASDAQ:SPNE) with a “buy” rating and price target of $22. The stock closed at $14.97 on Oct. 19.
“After several years of uneven performance post the 2015 spin-out from Integra Lifesciences, SeaSpine is now demonstrating what we believe to be sustainable growth momentum,” writes analyst Mathew Blackman.
Mr. Blackman said he identified potential growth vectors that should support continued, above-market growth, including a differentiated portfolio with a balance of unique orthobiologics and complementary implants; an innovation engine, which has and will continue to drive an impressive new-product cadence, attracting new surgeons and increasing existing customer penetration; and ongoing sales channel optimization and U.S. footprint expansion/upgrade opportunities that should lift productivity higher.
Mr. Blackman is estimating a 12% revenue compound annual growth rate through 2023, with opportunities for upside. “And, with increasing scale and leverage in the implant business, combined with an already profitable orthobiologics franchise, EBITDA breakeven should materialize in three-to-four years,” he added.