BTIG upgrades AVITA Medical (RCEL) to Buy with $7 target after record Q2, outlook hike
BTIG upgrades AVITA Medical (RCEL) to Buy with $7 target after record Q2 results beat estimates and 2026 guidance raised
- Investor Takeaway: Strong sequential growth; 2026 revenue guidance raised and Q4 cash breakeven targeted.
- Key Results: Q2 revenue $21.7M, +18% YoY, +13% QoQ; EPS not disclosed.
- Q2 results exceeded analyst estimates, delivering a record quarter for AVITA Medical.
- ReCell: U.S. revenue $18.5M, ~13% sequential; Go Mini expanding into ≤500cm² wounds, 77% of procedures.
- International ReCell revenue up 26% sequentially; CoHelix $1.7M (+16%), Permaderm $0.6M.
- Guidance: 2026 revenue now $86–89M range, +20–24% YoY; prior $80–85M.
- Profitability: Gross margin 81.9%; ReCell ~86%; operating loss $6.9M; net loss $7.7M, improved YoY.
- Cash: Q2 use $3.2M; ending cash $11.1M; operating expenses $24.6M, flat QoQ.
- CoHelix adoption supported by ~55 active VAC reviews, with 10–15 completed each quarter.
- Outlook: New 2027 national CPT codes should simplify reimbursement and support further adoption.
- Main Risk: Low cash balance and execution around reimbursement transition and multi-product ramp.
- Main concern: Limited cash cushion and dependence on smooth execution of 2027 reimbursement transition to achieve cash breakeven.
- Strong quarter, driven by ReCell-led top-line acceleration, stable high margins, and disciplined operating expense control improving cash burn.
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