With near-term financing overhang removed and more confident in Iluvien’s sales growth, Cowen analyst Boris Peaker upgrades shares of Alimera Sciences Inc (NASDAQ:ALIM) from Market Perform to Outperform, while issuing a $3 price target, which represents a potential upside of 86% from where the stock is currently trading.

Peaker commented, “Alimera’s key overhang was limited cash balance and restrictive debt covenants. With the $26.5M financing completed a month ago, we believe the company is capitalized to comfortably reach cash-flow breakeven next year and not at risk of tripping its debt covenants. While the stock popped to $2/share right after the recent financing, it has come back down to $1.50/share, which we view as a very attractive entry point.”

The analyst continued, “We believe there are several factors that will continue to drive Iluvien growth in excess of $100M/yr (we estimate $94M in 2018 and $143M in 2019). Therefore assuming a 3.5x multiple on our 2018 sales, we arrive at our price target of $3/share for Alimera ($329M EV minus $34M debt, 100M fully diluted shares). As we gain further confidence in Iluvien’s sales potential, we see significant room for upside at current levels.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Boris Peaker has a yearly average return of 11.7% and a 51% success rate. Peaker has a -25.7% average return when recommending ALIM, and is ranked #215 out of 4158 analysts.