Goldman Sachs Starts Shoulder Innovations (SI) at Buy

Goldman Sachs analyst David Roman initiates coverage on Shoulder Innovations (NYSE: SI) with a Buy rating and a price target of $20.00.

The analyst comments: "When considering the revenue growth trajectory, attractive end-market, and SMID cap MedTech comps, we see meaningful upside to current valuation.
Our investment thesis centers on:

Driver #1: Key growth drivers for Shoulder Innovations include the anticipated use of IPO proceeds for sales force and commercial organization expansion, the launch of pipeline products that fill gaps in the portfolio and are accompanied by price premiums, and secular tailwinds such as the shift of procedures to the outpatient setting. Areas of upside to our estimates include faster market growth, more rapid share capture, and expansion into adjacent markets.

Driver #2: GS estimates contemplate that the proceeds from the IPO will provide sufficient runway for Shoulder Innovations to reach profitability. We model the first adjusted EBITDA breakeven quarter in 4Q29, with $39 million in cash on hand at the end of 2029. Key levers that will influence the road to profitability include the revenue trajectory, gross margin trajectory where the key variables are product mix and anticipated cost saving initiatives, and the magnitude of operating leverage as we model significant reinvestment in the business with some leverage due to natural scale.

Valuation: We adopt a target EV/Sales NTM multiple of 5.5x applied to our Q5-Q8 (3Q26-2Q27) sales estimates of $65 million. Our EV/Sales multiple is set with reference to a comparable group of orthopedics companies, high growth cap MedTech, and recent MedTech IPOs. Our price target implies a 28% premium to the comp group reflecting Shoulder Innovations's strong growth profile and post IPO cash position."

For an analyst ratings summary and ratings history on Shoulder Innovations click here. For more ratings news on Shoulder Innovations click here.

Shares of Shoulder Innovations closed at $12.71 yesterday.

You May Also Be Interested In

• Stripe, Advent In Talks To Buy Paypal - WSJ
• Intuitive Machines Inc. (LUNR) PT Lowered to $32 at Cantor Fitzgerald, Reaffirms Overweight Rating
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy