iRhythm Technologies (IRTC) won a pair of lucrative reimbursement codes from Medicare, leading IRTC stock to rocket early Friday.
Specifically, the Chicago-area Medicare Administrative Contractor increased how much it will pay for two of iRhythm's wearable heart-monitoring devices. In response, iRhythm boosted its 2022 revenue expectations by $10 million.
"We believe iRhythm has a durable revenue growth profile with a visible path to profitability," Needham analyst David Saxon said in a report to clients.
In premarket trading on today's stock market, IRTC stock surged 21.9% near 144.
IRTC Stock: Sales Beat, Though Losses Grow
iRhythm makes wearable devices that monitor for irregular heart rhythms. It combines a medical device worn for up to two weeks with cloud-based data analytics. And, in the first quarter, Saxon says the company showed "underlying strength."
Sales popped more than 24% to $92.4 million and easily beat views for $86.8 million, according to FactSet. The company reported deeper-than-expected losses, however, at $1.71 per share. Analysts called for $1.10 and, in the year-earlier quarter, iRhythm reported a smaller 95-cent per-share loss.
For the year, iRhythm now expects $410 million to $420 million in sales — raising both the top and bottom ends of the outlook by $10 million. IRTC stock analysts currently call for $417.3 million in sales.
The Chicago shift is an unexpected boon. Two of iRhythm's devices will receive reimbursements of $329 and $342. The same devices in Houston only receive $223 and $233. As a result, iRhythm will likely focus on processing a higher number of Medicare volumes in Chicago, Saxon said.
He kept his buy rating on IRTC stock.
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