H.C. Wainwright Starts Surgalign Holdings Inc (SRGA) at Buy

(Updated - December 21, 2022 6:43 AM EST)

H.C. Wainwright analyst Swayampakula Ramakanth initiates coverage on Surgalign Holdings Inc (NASDAQ: SRGA) with a Buy rating and a price target of $3.50.

The analyst comments "Pure-play spine player on a turnaround. Surgalign is a pure-play global spine company focused on developing digital health solutions for spine surgery and commercializing spinal implants and orthobiologics used in spinal fusion and motion preservation surgeries. The company commercializes its current portfolio of spinal impant products through a direct sales force and a distributor network. These products generate $80M in annual baseline revenue and is expected to grow 5% per year, in-line with the broader spine market. Mr. Terry Rich was appointed President and CEO in July 2020. The new management team has embarked on a strategy to execute a turnaround. Surgalign has acquired two private companies, HOLO Surgical and Inteneural Networks (INN) that have been developing Artificial Intelligence (AI) and Augmented Reality (AR) platforms to enter the nascent computer aided surgery market. The company received 501(k) clearance for HOLO Portal in January 2022 and currently there are four installations in the U.S. We believe HOLO Portal will be enhanced with INN’s platform in the near future and these digital solutions can drive significant abovemarket growth in the mid- to long-term. While we anticipate HOLO Portal has multiple shots on goal, we conservatively account for HOLO Portal associated revenues only for thee currently approved indications. Taking together both implants and digital products, we expect Surgalign revenues to grow to $218M in 2031 from $82M in 2022, at a CAGR of 11% (2022-2031). We believe SRGA at current market capitalization of $10M is significantly undervalued and provides an attractive entry point for long-term investors."

For an analyst ratings summary and ratings history on Surgalign Holdings Inc click here. For more ratings news on Surgalign Holdings Inc click here.

Shares of Surgalign Holdings Inc closed at $1.36 yesterday.

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