OrthoPediatrics Could Win By Tapping A Massive, Underserved Market, Says Stifel

OrthoPediatrics Could Win By Tapping A Massive, Underserved Market, Says Stifel

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Shanthi Rexaline , Benzinga Staff Writer /November 6, 2017

Orthopediatrics Corp KIDS 4.9% is poised to achieve strong top-line growth due to its exclusive focus on the sizeable and largely underserved $2.5 billion pediatric orthopedic market, according to Stifel.

Stifel initiated coverage of Orthopediatrics with a Buy rating and a $23 price target for the shares. The valuation represents a 5.5 times enterprise value to revenue multiple, applied to Stifel’s 2019 revenue estimate for Orthopediatrics of $63.6 billion and discounted 10 percent to the end of 2018.

The pediatric orthopedic market, including trauma and deformity, complex spine and sports medicine, offers the most comprehensive and still-expanding portfolio of pediatric orthopedic implants and instruments to treat a wide array of orthopedic conditions, said analyst Rick Wise.

Capitalizing on this opportunity, Wise said the firm can deliver top-line CAGR in the solid high teens, suggesting revenues that would icrease from an estimated $45 million this year to $98.5 million in 2022. This would put Orthopediatrics above the average revenue growth among its peers.

 

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