BTIG ups AtriCure to buy; PT $35

Unknown.png

BTIG upgraded AtriCure (NASDAQ:ATRC) to “buy” from “neutral” with a price target of $35 based on the shares having recently slid. The stock closed at $27.37 on April 1.

At a current 3.8 times enterprise value/next 12 months revenue valuation, “we feel investors can be rewarded through quarterly beats and enthusiasm ahead of CONVERGE data,” writes analyst Dr. Sean Lavin. “We are setting our price target at $35 based on the shares trading at five times estimated sales over 12-to-24 months.”

AtriCure provides innovative technologies for the treatment of atrial fibrillation (AF) and related conditions. The CONVERGE IDE trial is comparing the Convergent approach to endocardial catheter ablation for patients with persistent or long-standing persistent AF.

“Fundamentals have improved as the open business has stabilized and AtriClip continues to gain momentum,” Dr. Lavin said. “We are disappointed about the lack of CONVERGE data in 2019 (many expected it this year), but we appreciate management’s reasonable conservatism around FDA timelines.”

Dr. Lavin said the company would likely hold the data until the FDA panel (if there is one). “We think the key here is appropriately setting investor expectations and expect a better than 65% to 70% success rate will propel minimally invasive surgical adoption.”

Stephen Kilmer