Brinson Patrick Starts Corcept Therapeutics (CORT) at Outperform; Analyst Sees 'Significant Upside'
Tweet
Share
E-mailGet Alerts CORT Hot Sheet
Price: $23.15 --0%
Rating Summary:
7 Buy, 8 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 7 | Down: 9 | New: 45
Rating Summary:
7 Buy, 8 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 7 | Down: 9 | New: 45
Join SI Premium – FREE
Brinson Patrick initiated coverage on Corcept Therapeutics (NASDAQ: CORT) with a Market Outperform rating and a price target of $8.00. Analyst Christopher S James called the stock an orphan drug play with significant upside potential
"With solid revenue growth and several major near-term catalysts, we view 2014 as a potential breakout year for Corcept shareholders. Corcept's lead product, Korlym™ (mifepristone), was launched in 2Q:12 for the treatment of Cushing’s syndrome. The initial uptake was slow because endocrinologists are more conservative with newer agents and the sales team was not fully deployed until 4Q:12, in our view," said James.
James continued, "We view the valuation as attractive, given the strong Q/Q growth rates. Korlym sales grew 56% quarter-over-quarter with 4Q:13 sales of $4.1M compared to $2.6M in 3Q:13. Management gave 2014 revenue guidance of $24M to $28M, compared to 10.4M for FY13, an increase of ~150% Y/Y. Given the present single digit penetration rate in Cushing's syndrome, there remains significant room for growth. As a reminder, Corcept ended FY13 with $54.9M in cash and will likely reach cash flow break-even without having to raise additional funds."
"We reach our $8.00 price target by using our standard Discounted Cash Flow (DCF) approach that projects cash flows through 2030. Projected cash flows are discounted to present value using a 20% discount rate and a 3% terminal rate. We would own the stock given the potential for meaningful share appreciation from Korlym sales and potential upside from PMD that is not yet reflected in our valuation. We believe 2014 will be a transformational year for the stock, driven by rapid revenue growth and upcoming Phase III data in PMD in 2Q:14," he added.
For an analyst ratings summary and ratings history on Corcept Therapeutics click here. For more ratings news on Corcept Therapeutics click here.
Shares of Corcept Therapeutics closed at $4.36 yesterday.
"With solid revenue growth and several major near-term catalysts, we view 2014 as a potential breakout year for Corcept shareholders. Corcept's lead product, Korlym™ (mifepristone), was launched in 2Q:12 for the treatment of Cushing’s syndrome. The initial uptake was slow because endocrinologists are more conservative with newer agents and the sales team was not fully deployed until 4Q:12, in our view," said James.
James continued, "We view the valuation as attractive, given the strong Q/Q growth rates. Korlym sales grew 56% quarter-over-quarter with 4Q:13 sales of $4.1M compared to $2.6M in 3Q:13. Management gave 2014 revenue guidance of $24M to $28M, compared to 10.4M for FY13, an increase of ~150% Y/Y. Given the present single digit penetration rate in Cushing's syndrome, there remains significant room for growth. As a reminder, Corcept ended FY13 with $54.9M in cash and will likely reach cash flow break-even without having to raise additional funds."
"We reach our $8.00 price target by using our standard Discounted Cash Flow (DCF) approach that projects cash flows through 2030. Projected cash flows are discounted to present value using a 20% discount rate and a 3% terminal rate. We would own the stock given the potential for meaningful share appreciation from Korlym sales and potential upside from PMD that is not yet reflected in our valuation. We believe 2014 will be a transformational year for the stock, driven by rapid revenue growth and upcoming Phase III data in PMD in 2Q:14," he added.
For an analyst ratings summary and ratings history on Corcept Therapeutics click here. For more ratings news on Corcept Therapeutics click here.
Shares of Corcept Therapeutics closed at $4.36 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Evercore ISI Starts Marvell (MRVL) at Outperform, 'MARVELLous AI Growth'
- BofA Securities Starts Reddit (RDDT) at Neutral
- Goldman Sachs Starts DraftKings Inc. (DKNG) at Buy, 'Inflecting Profitability as Unit Economics Improve'
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Hot New Coverage, New CoverageSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
