Shares of Penumbra are advancing about 6.6% in Thursday's pre-market trading after the medical devices’ manufacturer reported 3Q revenues of $151.1 million that increased 7.7% on a constant currency basis and beat the Street consensus of about $125 million.
Penumbra's (PEN) top-line benefitted from a 22% growth in the U.S. revenues. The company's 3Q earnings plunged 76% to $0.06 per share year-over-year, while analysts had expected a loss of $0.08. Lower gross and operating profits contributed to the profit decline.
The healthcare company said “While we have continued to see some positive trends in certain areas of our business beginning in May, we remain mindful of the negative impacts on business trends we experienced in April due to the COVID-19 outbreak.” Further, the company said that “the on-going impact of the pandemic in the United States and other parts of the world could cause periodic disruption in our revenue until the pandemic is contained.” (See PEN stock analysis on TipRanks).
Following the results, BTIG analyst Ryan Zimmerman maintained a Buy rating and a price target of $259 (11.3% upside potential) on the stock. The analyst said that “We see runway in Peripheral Vascular bolstered by increased clotting due to COVID, and while we expect PEN to lose share in Neurovascular, this is likely offset by adoption of mechanical thrombectomy longer-term.”
The analyst summed up that “We recognize PEN is at the high end of its historical valuation range but with estimates moving higher, what we view as upside to 4Q on conservative guidance, and longer-term growth opportunities in under-penetrated markets.”
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 5 Buys and 1 Hold. The average price target of $257.20 implies upside potential of about 10.5% to current levels. Shares have increased by about 41.7% year-to-date.