Analyst Steven Lichtman of Oppenheimer weighed in on ConforMIS Inc (NASDAQ:CFMS), after the medical device firm posted first-quarter earnings results. The company posted better than expected sales of $20.3 million compared to the analyst’s estimates of $19.1 million, attributing this win to “catch up procedures” from the 3q15 recall of specific serial numbers of the company’s base business, iUni, iDUi, iTOtal CR and iTotal PS knee replacement systems.
Despite slightly better than expected sales for Q1, the company lowered Q2 sales guidance from $84-87 million to $76-81 million, which accounts for a predicted $7 million loss of sales. The analyst explains “while seeing gradual recovery, [the company’s base business] hasn’t recovered to pre-recall ordering rates.” As a result of lowered guidance, the analyst has lightly lowered his sales forecast for 2016 and 2017. The analyst states, “Overall, the lowered guidance is obviously disappointing; CFMS is a show-me story.”
However, the analyst points to some good news for the company .He states that management witnessed increased demand for its iTotal PS since its broader launch in March. In q1, management reported that surgeries using the device increased 20% above their expectations for the quarter. The analyst notes that “this trend has continued in 2Q.” He also highlights that iTotal PS exposes over 50% of the total primary knee replacement market for the company.
The analyst maintains his outperform rating and lowered his price target from $18 to $12 as a result of his decreased estimates.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Steven Lichtman has a yearly average return of -0.4% and a 59% success rate. Lichtman has a -67% average return when recommending CFMS, and is ranked #2672 out of 3910 analysts.
Out of the 5 analysts polled by TipRanks in the past 3 months, 3 are bullish are bullish on ConforMIS stock, while 2 remain neutral. The average 12-month price target for the stock is $10.38, marking a 90% upside from where shares last closed.