BTIG downgraded Senseonics Holdings (NYSE American:SENS) to “neutral” from “buy” and removed its price target, citing Senseonics’ stock price, which has soared about 500% over the past month. The stock closed at $2.67 on Jan. 20.
“We cannot point to any fundamental reason to explain this incredible rise, though we have heard of excitement among retail investors (as evidenced on discussion forums frequented by retail investors) and the potential for short covering (short interest was about 40% of the float at the end of 2020),” writes analyst Marie Thibault.
Senseonics shares are now trading at about 20 times enterprise value/sales on forecasted 2022 revenue, she added.
“Although we continue to like the Eversense technology and think the more favorable reimbursement landscape and experienced commercial partner in Ascensia Diabetes Care can allow Senseonics to reach its projected sales targets, we cannot justify a valuation multiple above the top-performing names in diabetes technology,” Ms. Thibault said.
“We reserve mid-teens (and higher) enterprise value/sales valuation multiples for consistent, high-growth MedTech companies that lead their field,” she added. “In our view, Senseonics has much to prove before warranting this type of valuation multiple. We continue to see positive catalysts ahead, but we believe these are already assumed in the current stock price.”