Morgan Joseph Initiates Coverage on Volcano (VOLC) with a Buy
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Morgan Joseph initiates coverage on Volcano (Nasdaq: VOLC) with a Buy. Price target $20.
Morgan analyst says, "A growing body of clinical data is demonstrating the value of Volcano's technology, in our view, and increasing demand for its products among cardiologists. Data from the FAME and PROSPECT clinical trials showed that IVUS and FM can be used to better guide treatment decisions, resulting in a statistically significant reduction in Major Adverse Coronary Events (MACE) and reducing the number of unnecessary interventions. As the only system that can do both IVUS and FM together, hospitals can obtain the latest in IVUS and FM technology without having to buy two separate pieces of equipment...Later this year, Volcano is planning to release updated versions of its IVUS imaging catheters and FM pressure wires. In 2010, the company plans to add a high-resolution imaging technology called Optical Coherence Tomography (OCT) to its platform capabilities, and launch image-guided therapy (IGT) in Japan. Forward-Looking IVUS (FLIVUS) for the treatment of chronic total occlusions could reach the market in 2011. These products help cardiologists address unmet needs and, in our opinion, represent potential markets worth more than one billion dollars...Growth kicker from going direct in Japan."
"We believe that VOLC can achieve a $20 target, which is 3.8x our 2010 revenue estimate of $269.6 million. The stock has historically traded between 3.4x-4.9x over the past two years, which is at the upper end of the current comp group range of 0.8x-5.2x. We use a revenue multiple because the company is not yet profitable, though it is expected to reach profitability in the fourth quarter of 2010."
To see more analyst ratings on VOLC Click Here.
Volcano Corporation designs, develops, manufactures, and commercializes a suite of intravascular ultrasound (IVUS) and functional measurement (FM) products.
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