OrthoPediatrics Corp. (KIDS) PT Lowered to $23 at BTIG

BTIG analyst Ryan Zimmerman lowered the price target on OrthoPediatrics Corp. (NASDAQ: KIDS) to $23.00 (from $39.00) while maintaining a Buy rating.

The analyst commented: "We reduce our PT to $23 (from $39) after KIDS announced preliminary 3Q revenue results. Revenue is expected to be $61.2M (12% Y/Y) vs. BTIG/Cons. estimates of $63.2M/$63.6M as international orders of instrument set sales in Central and South America were light coupled with elongated sales cycles for 7D (which did not close in the quarter). Mgmt. noted that T&D and Scoliosis sales were strong coupled with 20%+ OPSB sales growth as core dynamics remain steady. Following the preannouncement, KIDS removed expectations for ~$5M in total sales (~$2.5M in 4Q25) reducing revenue guidance for FY25 to $233.5M - $234.5M from $237.0M - $242.0M as growth is now expected to be 14.1% - 14.5% Y/Y. Despite these changes, KIDS expects unchanged profitability metrics with FCF break-even in FY26. Mgmt. also reduced its LT growth expectations to 12%+ (from high-teens previously) which sets a new bar for FY26 and beyond. With shares already being fairly depressed (~1.4x NTM EV/Sales) and not being rewarded with growth in the mid-teens previously, KIDS decided now was the right time to re-base LT expectations so that they could start over-achieving in FY26. We agree with this strategy, even if shares are likely to trade off initially. Ultimately KIDS will have to start beating to win investors back over but, at the current valuation, there is limited downside in our view."

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