BTIG cuts iCAD PT to $12 from $25; maintains buy rating


BTIG slashed its price target for iCAD (NASDAQ:ICAD) to $12 from $25 but maintained its “buy” rating, ahead of the company’s fourth quarter earnings report next week. The stock closed at $4.97 on Feb. 23.

In a preliminary fourth quarter report earlier this year, the company pointed to a stiff headwind late in the quarter as the Omicron variant impacted customers and the company’s own sales team, worsened staffing shortages, and resulted in international restrictions. Sales and deal closures were delayed beyond the end of 2021.

Analyst Marie Thibault writes that as the company works to recover from these dynamics and regain traction, ICAD also is adjusting its sales team to focus on selling to administrators, like chief technology and information officers and to target accounts with Hologic 3D mammography systems. 

Hologic is the market leader in mammography hardware, so “we see this as a smart strategy that can further boost the customer funnel,” she added. “Still, these purchasing decisions take time and we have yet to see significant sales from the focus on the enterprise customer segment.”

Ms. Thibault said the “onus is on iCAD to prove that this selling approach can work, and we view this as a turnaround year, particularly during the second half of 2022.” 

With a new CEO taking the reins in December 2021 and a promise of sharper focus on commercial execution, “we are remaining patient and maintain our buy rating on iCAD.”