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HCW starts MiMedx at buy; PT $20

MiMedx Group

H.C. Wainwright launched coverage of MiMedx Group (NASDAQ:MDXG) with a “buy” rating and $20 price target. The stock closed at $8.81 on March 18.

MiMedx is a wound care industry leader commercializing placental allografts. The company processes donated tissues with its patented PURION technique to produce allografts that can be stored at room temperature with a five-year shelf life.

“We view MiMedx as a turnaround story at an inflection of sustainable growth because of revamped management, a multi-year commercialization plan and a late-stage R&D pipeline,” writes analyst Swayampakula Ramakanth.

Mr. Ramakanth said MiMedx plans to expand its domestic sales force by more than 10% by the end of 2021, which could translate into 2021 revenue growth. And the next growth wave could come from geographic expansion into Japan, the UK and Germany over the next three years.

“We note that the company’s cash position of $96-million at the end of 2020 is sufficient to execute the plan,” he added.

MiMedx targets a large chronic wound market of greater than $5-billion, Mr. Ramakanth said. “Considering the company is in much better shape under the new management, we believe MiMedx is undervalued at the current price.”

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