BTIG Trims PT on AtriCure (ATRC) to $19; Management 'Disconnect' Causes Concern
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BTIG cut its price target on Buy-rated AtriCure (NASDAQ: ATRC) from $34 down to $19 after the company reported Q2 results late last week.
Analyst Sean Lavin commented,
ATRC reported a relatively in-line but messy quarter with the core business coming in soft while increased focus on nContact drove MIS growth. The DEEP trial was put on hold due to an adverse event. Mgmt lowered guidance as we expected and seemed prudent but also shied away from long-term 18% aspirations which we were not expecting. We sense there is a bit of an investor/mgmt disconnect. Mgmt feels things are going well and investors are disappointed. Thus ATRC trades at a discount, under 3x NTM rev, but we feel may stay there for a while. We lower our PT to $19 from $25 based on lower estimates and sentiment but feel shares are cheap.
We hear from investors that they are concerned by continuous mild issues each quarter (distributor in China, guidance too high, DEEP trial, salesforce distraction, etc.). At the same time, we do not feel mgmt sees a problem and to their credit, for 12+ straight quarters they did meet consensus. All told though, we feel until this gap is cleared up, ATRC is likely to trade at a discount to its peers, Lavin noted.
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