Stifel initiated coverage of ViewRay (NASDAQ:VRAY) with a “buy” rating and price target of $7, reflecting a multiple of 8.3 times estimated 2023 revenue of $130-million. The stock closed at $4.46 on Jan. 24.
“We see ViewRay’s MRIdian linear-accelerator (LINAC) system as offering transformational radiation therapy technology for cancer treatment,” writes analyst Rick Wise.
In five early-adopter conversations, he said physicians repeatedly-emphasized MRIdian’s “meaningfully-differentiated clinical benefits and their expectations that, over the next two-to-four years, MRIdian utilization will expand across an expanding-array of oncological diseases.”
Despite radiation therapy’s already-wide use, Mr. Wise said incumbent CT/X-Ray-based LINACs offer suboptimal treatment/visualization/adaptability.
“MRIdian is the only system leveraging real-time MRI-guided technology with automated beam gating to safely-deliver more effective treatment in five-or- fewer fractions/sessions (traditionally 20-to-40),” he added.
Over time, Mr. Wise said multiple factors should drive MRIdian’s worldwide LINAC total addressable market ($5.9-billion) penetration and ViewRay’s 30%-plus revenue compound annual growth rate from 2020 to 2024.
He cited continued product enhancements/innovations expanding MRIdian’s application for existing/new cancer diagnoses; steady data releases from 80-plus clinician-sponsored trials likely-supporting increased MRIdian utilization; and favorable CMS reimbursement changes (early-2023).
