Vericel Corp (VCEL) Draws Jacked Up Price Target Following Stellar Earnings Show

BTIG's Ryan Zimmerman now spotlights 18% in return potential for VCEL shares on back of an impressive fourth quarter performance.

Vericel Corp (NASDAQ:VCEL) gave investors the best gift this morning: a stellar fourth quarter print, a standout first quarter guide, and a stock that has subsequently been sent rocketing 32% today.

BTIG analyst Ryan Zimmerman sings the praises of this biotech player’s “impressive” success, noting: “There is no better feeling than when a growth stock accelerates beyond expectations.”

In reaction, the analyst reiterates a Buy rating on VCEL stock while hiking the price target from $8 to $13, which implies a close to 18% upside from current levels. (To watch Zimmerman’s track record, click here)

For the fourth quarter, VCEL posted $23.4 million, soaring well past both Zimmerman’s forecast of $17.8 million as well as the Street’s $18.8 million. Another winning point for VCEL: the company’s full-year revenue guide for 2018 beat out the Street by around $4 million at the midpoint, angling for $73 to $78 million in revenue.

“VCEL’s growth is reflective of both strong patient and physician interest in MACI and continued market penetration of Epicel. To that end, mgmt. is keeping their foot on the gas pedal supporting growth through various marketing and physician outreach initiatives. With biopsy growth accelerating through FY17 while conversion rates to procedures remain steady we think mgmt. has additional levers to increase rev in FY18 through increased conversions,” underscores Zimmerman.

Biopsies for the company surged a solid 48% year-over-year with revenue jumping 27% year-over-year, and the company now having trained 600 doctors- with roughly 2400 prospective MDS “still available.” The VCEL team pointed out a 10% climb in the average number of biopsies sent from existing doctors. From the analyst’s eyes, these results are encouraging, “consistent with our thesis that the procedure is easier to adopt and supports continued momentum in the newer MDs over FY18.”

Though revenue outlook will be prioritized over biopsy growth looking ahead, the analyst is unfazed: “Mgmt. noted it plans to use rev guidance and not provide biopsy growth going forward. We don’t see that as a negative given VCEL is entering a 2nd year of MACI commercialization.”

On a final bullish note, “With Epicel now in 40 burn centers, VCEL has grown through a combo of price and unit growth. We see continued opportunity given ~120 total burn centers in the US,” contends Zimmerman.

TipRanks points to early initial bullish word for this biotech player, with all 3 analysts polled in the last 3 months rating a Buy on VCEL stock. With a loss potential of 18%, the stock’s consensus target price stands at $9.00.

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