BTIG cuts Obalon Therapeutics PT to $7 from $13

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BTIG lowered its price target for Obalon Therapeutics (NASDAQ:OBLN) to $7 from $13 after the company reported in-line fourth quarter results and guidance for 2018. The stock finished at $4.01 on March 5.

Obalon is focused on developing and commercializing novel technologies for weight loss, including the first and only FDA-approved swallowable, gas-filled intragastric balloon system for the treatment of obesity. 

“Given the current stock price, we believe conservative guidance makes sense but are surprised how low guidance was set ($14-million to $18-million versus a Street range of $18-million to $24-million),” writes analyst Sean Lavin.

“We believe guidance is achievable and this could help shares over the next year, but we hope guidance is a kitchen sink because to get investors meaningfully re-interested in this story, we feel it will need to be significantly beaten,” he added.

Dr. Lavin said that management, on a conference call, provided multiple commercial metrics to help investors understand the fundamentals of the business.

“While this may be a start to a long journey back up, we feel management should be more willing to answer specific questions, such as exactly how many reps they have / plan to hire, how Q1 is going, and how they expect quarters may play out,” he added. “Clarity is key when stocks are under pressure.”