Data-Driven Growth Fuels More Upside For Overlooked Artivion

seekingalpha06-22

Artivion, Inc. has continued to log double-digit revenue growth with contributions from diverse assets including its stent grafts, heart valves, and cryopreserved tissue grafts.Positive post-approval ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2445790837?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1726072110/image_1726072110.jpg","is_english":true,"pubTime":"2024-06-22 05:01","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2445790837","market":"sh","top_or_hot":-1,"title":"Data-Driven Growth Fuels More Upside For Overlooked Artivion","media":"seekingalpha","content":"<div>\n<p>Artivion, Inc. has continued to log double-digit revenue growth with contributions from diverse assets including its stent grafts, heart valves, and cryopreserved tissue grafts.Positive post-approval ...</p>\n\n<a href=\"https://seekingalpha.com/article/4700446-data-driven-growth-fuels-more-upside-for-overlooked-artivion\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Data-Driven Growth Fuels More Upside For Overlooked Artivion</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nData-Driven Growth Fuels More Upside For Overlooked Artivion\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-22 05:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4700446-data-driven-growth-fuels-more-upside-for-overlooked-artivion><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Artivion, Inc. has continued to log double-digit revenue growth with contributions from diverse assets including its stent grafts, heart valves, and cryopreserved tissue grafts.Positive post-approval ...</p>\n\n<a href=\"https://seekingalpha.com/article/4700446-data-driven-growth-fuels-more-upside-for-overlooked-artivion\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0211326755.USD","symbol_name":"TEMPLETON GLOBAL INCOME \"A\" (USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4700446-data-driven-growth-fuels-more-upside-for-overlooked-artivion","article_id":"2445790837","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1726072110/image_1726072110.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2445790837","pubTimestamp":1719003714,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"It is normal to prescribe anticoagulant therapy to people who get artificial heart valves to reduce the risk of clots forming around the valve, breaking free, and causing havoc elsewhere in the body . Unfortunately, anticoagulants have their own side effects, including an elevated risk of bleeding. What this study confirms is that it's safe to implant the On-X valve and prescribe a lower level of anticoagulation therapy, improving patient quality of life without compromising their safety. The second major data driver is the PERSEVERE study of Artivion's AMDS hybrid prosthesis for acute DeBakey Type 1 aortic dissection, a market worth pot","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0211326755.USD":"TEMPLETON GLOBAL INCOME \"A\" (USD) ACC","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","BK4581":"高盛持仓","IE00B7SZL793.SGD":"Legg Mason Royce - US Small Cap Opportunity A Acc SGD-H","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","BK4504":"桥水持仓","LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","LU1691799644.USD":"Amundi Funds Polen Capital Global Growth A2 (C) USD","LU0122379950.USD":"贝莱德世界健康科学A2","TRUMY":"Terumo Corp.","LU2089283258.USD":"安联环球可持续基金Cl AM Dis","LU1291159041.SGD":"CPR Invest - Global Silver Age A2 Acc SGD-H","SGXZ23171101.USD":"NIKKO AM SHENTON GLOBAL OPPORTUNITIES (USD) ACC","LU0976567544.SGD":"FTIF - Templeton Global Income A Mdis SGD-H1","IE0002141913.USD":"JANUS HENDERSON GLOBAL LIFE SCIENCES \"I2\" (USD) ACC","AORT":"Artivion","IE00B66KJ199.SGD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY  \" A\" (SGD) ACC","ABT":"雅培","LU2468319806.SGD":"MANULIFE GF HEALTHCARE \"AA\" (SGDHDG) ACC","IE00BFTCPJ56.SGD":"Janus Henderson Global Life Sciences A Acc SGD","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","IE00B19Z4B17.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) ACC","BK4592":"伊斯兰概念","LU0211331839.USD":"FRANKLIN MUTUAL GLB DISCOVERY \"A\" (USD) ACC","LU1989771016.USD":"东方汇理环球老龄化投资基金 A2 Acc","BK4585":"ETF&股票定投概念","MDT":"美敦力","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","LU2023251221.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"AM\" (USD) INC","BK4566":"资本集团","LU1023059063.AUD":"BGF WORLD HEALTHSCIENCE \"A2\" (AUDHDG) ACC","BK4082":"医疗保健设备","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU1057294990.SGD":"Blackrock World Healthscience A2 SGD-H","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","IE00BJT1NW94.SGD":"JANUS HENDERSON GLOBAL LIFE SCIENCES \"A2\" (SGDHDG) ACC","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD","BK4588":"碎股","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU1989764748.USD":"东方汇理环球颠覆性机遇A2 Acc","BK4568":"美国抗疫概念","SG9999002232.USD":"Allianz Global High Payout USD","SG9999004303.SGD":"Nikko AM Shenton Global Opportunities SGD","LU2237957902.USD":"NIKKO AM GLOBAL EQUITY \"F\" (USD) ACC","SG9999002224.SGD":"Allianz Global High Payout SGD","LU1989763427.SGD":"CPR Invest - Food For Generations A2 Acc SGD-H","LU2237957811.SGD":"NIKKO AM GLOBAL EQUITY \"F\" (SGD) ACC","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LU0496365809.HKD":"TEMPLETON GLOBAL INCOME \"A\" (HKD) INC (Q)"},"translate_title":"数据驱动的增长为被忽视的Artivion带来更多上涨空间","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AORT":1,"TRUMY":1,"MDT":1,"ABT":1},"content_text":"Artivion, Inc. has continued to log double-digit revenue growth with contributions from diverse assets including its stent grafts, heart valves, and cryopreserved tissue grafts.Positive post-approval trial data for the On-X aortic valve and a successful PERSEVERE IDE study for AMDS hybrid prosthesis can drive additional revenue growth.A strong pipeline, including NEXUS and ARCEVO stent graft systems, can support a longer runway of continued revenue growth.A 4x revenue multiple drives a fair value above $30 and still offers room for further re-rating.ronstik/iStock via Getty Images I'm not exactly surprised that a sub-$1B growth med-tech continues to be overlooked in the market, but Artivion, Inc. (NYSE:AORT) management is doing the right things to continue developing a growth story fueled by data-backed innovative products in cardiac care. Up more than 70% since my last article, Artivion has handily outperformed its comps, but I don't think the story is quite done. It doesn't take particularly ambitious assumptions to support a $30-plus fair value, and I think ongoing execution will get this stock more of its due over the next year or two. Strong Data Can Drive Share Growth And Market Penetration, Fueling Double-Digit Revenue Growth Artivion has logged some solid quarterly performances since my last update, with quarterly constant currency revenue growth of 12% (Q3 '23), 15% (Q4 '23), and 16% (Q1 '24) that has surpassed prior sell-side estimates and driven increased guidance from management. More importantly, I think there are meaningful data-based drivers that can continue to support healthy growth. Strong post-approval trial data for the On-X aortic valve in low-INR should help the company's On-X mechanical heart valve continue to gain share in a roughly $250M addressable market. Five-year safety data showed meaningful safety benefits for this valve relative to not only historical controls but also the IDE study for the device, with a combined safety event rate (thromboembolism, valve thrombosis, and major bleeding) of 1.8% versus a historical control of 5.4%. Relative to the IDE study, major events were far rarer (a 66% reduction versus 28%) and major bleeding was down 87% versus 60%. Importantly, there were no cases of thromboembolism in the On-X group. Artivion Why does any of this matter? It is normal to prescribe anticoagulant therapy to people who get artificial heart valves to reduce the risk of clots forming around the valve, breaking free, and causing havoc elsewhere in the body (strokes and so on). Unfortunately, anticoagulants have their own side effects, including an elevated risk of bleeding. What this study confirms is that it's safe to implant the On-X valve and prescribe a lower level of anticoagulation therapy, improving patient quality of life without compromising their safety. The second major data driver is the PERSEVERE study of Artivion's AMDS hybrid prosthesis for acute DeBakey Type 1 aortic dissection, a market worth potentially $500M or more and where there are limited competitive options (Artivion has a breakthrough therapy designation here). The PERSEVERE study showed a 28% 30-day major adverse event rate, better than the historical control of 58%, better than the 40% target, and better than the interim result of around 31%. All-cause mortality was under 10%, below the stated historical control of 34.6%, and more recent medical literature suggests 16%-30% 30-day all-cause mortality. The rates of stroke and renal failure were likewise lower, and there were no instances of heart attack in the device group. Artivion Management has already tied its guidance hike in part to these data releases, but I believe this tailwind will last beyond just a year, particularly with the AMDS prosthesis, as the device hasn't even been cleared for marketing in the U.S. yet. A Healthy Pipeline Can Maintain The Growth I expect the AMDS stent graft to be a key driver for Artivion for some time, but it's not the only product of note to watch. The NEXUS stent graft system from Endospan could bring a $600M-plus addressable market in chronic dissections and aneurysms, assuming the TRIOMPHE study is successful and the company elects to acquire the company. There's still some time to wait here, though, with TRIOMPHE follow-up ending in 2025 and approval expected in 2026. The company also has its ARCEVO stent graft program, which would replace the entire aortic arch. Clinical studies should start this year, setting up the possibility of commercialization in 2027 or 2028, and the company has received an FDA Breakthrough Device designation for this product as well. I would expect some cannibalization of sales from this product, but I believe it would also accelerate Artivion's market penetration efforts and further distance it from rivals like Terumo Corporation (OTCPK:TRUMY). The Outlook I believe there's a strong case here that Artivion has successfully deployed capital into M&A to meaningful grow the company's addressable market opportunities and accelerate its revenue growth, but the more established businesses can still offer a lot. The tissue processing business remains a strong contributor to the business, with its SynerGraft technology offering clinically validated lower re-operation rates, and there are still growth opportunities in applications like the Ross procedure (a complex procedure for younger patients that offers a more durable solution for aortic valve dysfunction). Likewise, On-X has been part of the company for close to eight years now and still has opportunities to gain share from rivals like Abbott Laboratories (ABT) and Medtronic plc (MDT) who really don't appear that interested in reinvesting into the mechanical heart valve space. I expect around 10% to 11% revenue growth over the next three years, and I think 10% growth at the five-year mark is plausible. Longer term, I expect growth will decelerate toward 8% to 9%. The importance of maintaining double-digit growth could be somewhat underappreciated, as many institutional investors won't consider small-cap med-tech that doesn't have it, and historically, smaller companies with single-digit revenue growth have been relatively undervalued. With revenue acceleration, I expect meaningful margin leverage. I've trimmed back my expectations for FY'24 EBITDA margin by about 150bp to 18%, but I'm still expecting a meaningful three-point year-over-year improvement and still looking for 20%-plus margins in FY '25 and beyond. Over time, I believe Artivion can generate free cash flow margins in the high teens, including positive free cash flow in 2024, supporting strong annualized FCF growth from an admittedly low starting point. Although Atrivion's debt is higher than I'd like to see (around 3.7x my estimated '24 EBITDA), the business is profitable and should generate positive FCF from here. Between discounted cash flow and growth/margin-driven EV/revenue approaches, I still believe Artivion is undervalued. I previously valued Artvion a little more conservatively, but I think the clinical data updates do de-risk the growth thesis to at least some extent. With that, I'm increasing the forward revenue multiple from 3.25x to 4x, and with my new FY '24 revenue number that works out to around $31/share. I'd note that this still embeds some conservatism, as I could argue for a multiple as high as 4.75x, but I'm discounting that to account for the reality that while 10%-11% growth is literally double-digit growth, it isn't the 20%-plus that many growth-oriented institutional investors demand. The Bottom Line Even with the big move in the share price since my last update, I still think the Street is overlooking the potential at Artivion. It's true that the company's markets are relatively limited in size compared to other growth med-techs and the underlying market growth rates for the structural heart aren't as attractive, but I think that overlooks the significant growth that can be had by bringing innovation and \"better mousetraps\" to these markets. There will be a point where it's fair to ask if and how Artivion can maintain attractive revenue growth rates, but I think we're still some distance from that point and the shares have an upside meanwhile.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2445790837"}