Piper starts MiMedx at overweight

Piper Jaffray launched coverage of MiMedx Group (NASDAQ:MDXG) with an “overweight” rating and $10 price target. The stock closed at $8.35 on March 2.

MiMedx is the market leader for amniotic-based products used in wound care, pain management, and surgical, sports medicine and ortho (SSO) markets.

“With the market-leading product, EpiFix, the company is set to benefit from a doubling of tissue-based products in wound care going from an estimated $650-million today to $1.1-billion over the next several years,” writes analyst Matt O’Brien.

In addition, he said a move into pain management represents a large, untapped opportunity for the company.

“We think investors should view MiMedx as a high-teens top-line grower that is profitable and able to grow EPS double that of sales,” he added.

Mr. O’Brien also said the stock currently trades at a discount to its peers and its historical average, which “we expect to narrow over the next year.”