Exagen (XGN) PT Lowered to $19 at Cantor Fitzgerald on Weaker Guidance, but Analyst Maintained Overweight Rating and Positive Outlook, "Would Encourage Investors to Acquire Shares" at Current Valuatio

Cantor Fitzgerald analyst Ross Osborn lowered the price target on Exagen (NASDAQ: XGN) to $19.00 (from $23.00) while maintaining a Overweight rating, following the company's Q4 report.

The analyst comments: "We reiterate our Overweight rating on Exagen (XGN) shares while we reduce our 12-month price target to $19 from $23 following the company reporting 4Q21 results and establishing CY22 revenue guidance. XGN reported above-consensus 4Q21 revenue of $12.7 million and established CY22 revenue guidance in the range of $51.0 - $53.0 million (FactSet Consensus $56.8 million). The company's CY22 outlook is negatively affected by a weak 1Q22. Specifically, we estimate flat yoy revenue growth as COVID headwinds resulted in the worst January, in terms of volume, in the past three years. However, we reiterate our Overweight rating as we believe the company's outlook remains positive as: (1) the company reported record metrics in terms of ordering and adopting providers as well as record testing gross margin during the 4Q; (2) volume for the six weeks leading up to the earnings call (3/22) represented a new record high; (3) XGN reiterated timelines for the company's AVISE RADR and Fibromyalgia offerings (see below); and (4) the company signed an in-network agreement with Centene Health Plans (CNC, NC) which adds more than 22 million lives and should serve to attract further agreements, in our view. With shares trading at 0.9x our CY23 revenue estimate versus peers at 4.8x, we would encourage investors to acquire XGN's shares as we believe the current valuation presents an attractive entry point."

By Vlad Schepkov

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