Stifel launched coverage of Apollo Endosurgery (NASDAQ:APEN) with a “buy” rating and $12 price target. The stock closed at $8.59 on Dec. 8.
Apollo Endosurgery is a medical technology company focused on design, development, and commercialization of medical devices to advance gastrointestinal (GI) therapeutic endoscopy.
Analyst Mathew Blackman writes that his price target reflect a multiple of seven times an estimated sales projection of $86-million for 2023.
“Our investment thesis is straightforward: we forecast accelerating top-line growth and opportunities for additional revenue upside as new senior leadership executes against a more-refined strategic vision targeting large and currently under-penetrated global total addressable markets in GI and bariatric endoscopy,” he said.
In the near term, Mr. Blackman said “growth should approximate the upper-teens, and in 2023 and beyond, new growth-enhancing indications, like endoscopic sleeve gastroplasty, could sustainably lift the top-line trajectory to the 20%-plus range.”
While the company will remain in investment mode for the next several years, Mr. Blackman said there are also levers for improving profitability and lower cash consumption, which should become more visible over time.
