BTIG cuts TransEnterix to neutral on rapid stock rise

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BTIG downgraded TransEnterix (NASDAQ:TRXC) to “neutral” from “buy,” citing a tripling in the stock price, which has exceeded its price target of $3.50. The stock closed at $5.84 on June 27.

“We continue to like the company’s fundamentals and still view recent Senhance [surgical robotic system] sales momentum, positive international developments, and sustained rapid growth in the overall robotic market as pluses for TransEnterix,” writes analyst Dr. Sean Lavin. 

However, the fast increase in the share price has not been accompanied by any new fundamental catalysts or de-risking events around commercialization, he added.

At the current share price, Dr. Lavon said investors could be expecting strong near-term beats. “Senhance is in the early days of its U.S. launch and while we see encouraging signs for system adoption, we also know that capital equipment sales can be lumpy from quarter to quarter,” he added. 

“We want to emphasize we do not have new concerns about the company’s prospects,” Dr. Lavin said.“We remain disciplined on valuation, but do like the Senhance technology and believe the system should enjoy solid adoption in a fast-growing segment of the medtech market. That said, the revenue multiple has increased significantly.”

Michelle Carr