Shares in Itamar Medical are rising 3.2% in Tuesday’s pre-market trading as the medical device company is set to post better-than-expected third-quarter results and reinstated its 2020 financial guidance following demand for home-based testing.
Itamar Medical (ITMR) expects total revenue in the third quarter to generate between $10.7 million to $11 million, reflecting an increase of 32% to 36% compared with the same period last year, according to preliminary figures. Analysts had forecast sales of $9.49 million. The lion’s share of 3Q revenue was generated from sales of the company’s flagship WatchPAT, a diagnostic home device for sleep breathing disorders. US WatchPAT revenue is forecast to be $8.6 million to $8.9 million, a gain of 51% to 56% compared with last year. The company is scheduled to release third quarter financial results in mid-November.
“The fundamentals of our business are strong, and we continue to invest in critical activities to expand awareness and accelerate growth with special focus on the cardiovascular and digital health sectors,” said Itamar Medical CEO Gilad Glick. “I’m especially encouraged by the recognition our fully disposable Home Sleep Apnea Test is gaining, which substantially improves our long-term market expansion potential. It has become clear in this present healthcare environment that home-based testing is crucial to the diagnosis and treatment of sleep apnea, which affects approximately 54 million patients in the US and 1 billion people worldwide.”
In addition, Itamar Medical announced that it is reinstating its full-year 2020 revenue guidance, which it withdrew on April 13 due to the global market environment and uncertainties resulting from the COVID-19 outbreak. The company expects 2020 sales to amount to a range of $39.5 million to $40.5 million, reflecting growth of approximately 26% to 29% year-on-year. That compares with a Street consensus of $38.38 million.
Shares in ITMR have popped 69% so far this year. The stock scores a Strong Buy analyst consensus based on 3 recent Buy ratings. That’s with a $28 average analyst price target implying 30% upside potential lies ahead.
H.C. Wainwright analyst Ram Selvaraju earlier this month reiterated a Buy rating on the stock with a $28 price target, after the company’s WatchPAT won approval for use in the Japanese market.
“Itamar’s WatchPAT test still seems to be a winner in the current COVID-19 environment, which selects in favor of fully disposable home sleep apnea tests. We note that Japan represents the second-largest potential patient market for Itamar Medical behind the US,” Selvaraju wrote in a note to investors. “Investors should note that our revenue projections do not assume substantial contribution from Japanese sales, which may prove conservative.” (See ITMR stock analysis on TipRanks)
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