BTIG starts iCAD at buy; PT $25


BTIG initiated coverage of iCAD (NASDAQ:ICAD) with a “buy” rating and a price target of $25. The stock closed at $19.35 on March 22.

iCAD is a medical technology company focused on cancer care, offering both cutting-edge detection solutions and a unique therapy product, Xoft electronic brachytherapy (eBx).

The company’s two business segments are focused on expanding into areas of high unmet need, writes analyst Marie Thibault.

In the case of detection, she said the ProFound artificial intelligence (AI) solution has pioneered a shift toward using AI to help radiologists read mammography images more quickly and accurately. Its latest offering, ProFound AI Risk, is being launched now and pushes this further by giving clinicians and patients a more complete picture of the patient’s short-term risk of developing breast cancer, she added.

According to Ms. Thibault, Xoft eBx can be used anywhere in the body and is often used in tandem with cancer surgery to give patients good clinical outcomes with single-session treatment.

“Though the existing products represent significant revenue opportunity, iCAD also has a full pipeline for both sides of its business,” she said, adding that iCAD faces the same risks as its small MedTech peers, including the potential for competition from larger players, ability to consistently execute commercially, data from clinical studies, and customers’ appetite and budget for adopting new technology.

“However, we think the company’s stable core business, significant recurring revenue, ability to deploy novel business models, and product pipeline make iCAD a solid investment,” Ms. Thibault said.

While iCAD’s valuation has increased significantly over the past two years, “the shares still trade well under the level of fast-growing MedTech peers,” she added.