Piper Jaffray starts Ra Medical at OW; PT $23

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Piper Jaffray initiated coverage of Ra Medical Systems (NASDAQ:RMED) with an “overweight” rating and price target of $23. The stock closed at $13.25 on Oct. 19.

Ra makes and sells excimer laser products. While it has a long history in the dermatology space, “its big push going forward will be in the vascular market to pulverize plaque in the lower extremities,” writes analyst Matt O’Brien.

While there are a number of competitors in the space, “we believe Ra Medical has the best one at treating various blockages and its price point is extremely appealing to clinicians and hospital administrators, compared with those competitors,” he added.

Mr. O’Brien expects a steep revenue trajectory for Ra Medical in the vascular market in the coming quarters, which should yield “some of the best growth in med tech. Couple this feature with a modest valuation (about 2.4 times our 2019 revenue target) and we strongly encourage investors to start or build positions in the name,” he said.

Stephen Kilmer