SeaSpine Lifts FY21 Revenue Outlook; Street Sees 44.3% Upside


Shares of SeaSpine Holdings climbed 4.7% in after-hours trading on April 5 as the company that provides surgical solutions for the treatment of patients suffering from spinal disorders updated its revenue guidance for FY21.

SeaSpine Holdings (SPNE) expects FY21 revenues of between $200 million and $205 million, a jump of 30% to 33% year-on-year including the acquisition of 7D Surgical that it expects to complete in the second quarter of this year.

SPNE also expects this acquisition to be accretive to EBITDA from 2022 onwards. The company announced the acquisition of 7D Surgical for $110 million in a cash and stock deal late last month.

SPNE expects FY21 revenues to be between $193 million and $198 million, a rise of 25% to 28% year-on-year excluding the pending acquisition of 7D Surgical. Analysts have forecasted FY21 revenues of $185.8 million.

SPNE also posted its preliminary first-quarter FY21 results and expects total revenue to land between $41.5 million and $42 million, a decline of 10.5% to 9.5% year-on-year. However, this exceeded analysts’ expectations of 1Q revenues of $39.2 million. (See SeaSpine Holdings stock analysis on TipRanks)

SeaSpine’s President and CEO, Keith Valentine said, “We were pleased with how our revenue accelerated as the first quarter progressed. Despite the headwinds we faced in January and early February due to COVID restrictions on spine surgeries, we exceeded our own internal expectations for the quarter with strong results in March as those surgery restrictions eased.”

Following the preliminary results, BTIG analyst Ryan Zimmerman raised the price target from $25 to $28 (55.4% upside) and reiterated a  Buy rating on the stock. Zimmerman said in a research note, “We think this is a solid beat and not entirely surprising given SPNE’s multiple 1Q21 product launches and that the macro environment (e.g., COVID-related surgery restrictions) continues to improve.”

“Overall, we think preliminary results and upped guidance reflect confidence in the product cadence, SPNE’s ability to take incremental share, and overall market growth, all of which should help SPNE continue to grow at above-market levels,” Zimmerman added.

Turning now to the rest of the Wall Street community, SPNE has a Strong Buy consensus rating based on 5 Buys. The average analyst price target of $26 implies upside potential of about 44.3% to current levels. Shares have gained about 141.8% in one year.

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