Agreed, and we're not the only ones who think the stock is currently undervalued and predict the share price will go higher:
| 1 | | U.S. Analysts | Price Target | Upside Potential (RCEL: .70) |
|---|
| 2 | BTIG | $26.00 | 143% |
|---|
| 3 | Cantor | $26.00 | 143% |
|---|
| 4 | Piper | $23.00 | 115% |
|---|
| 5 | BofA Global Research | $27.00 | 152% |
|---|
| 6 | Lake Street | $40.00 | 274% |
|---|
| 7 | Cowen | ? | ? |
|---|
"Ryan Zimmerman has given his Buy rating due to several key factors related to Avita Medical’s recent performance and future prospects. Firstly, Avita reported preliminary revenue for 3Q23 that met expectations, with a revenue of approximately $13.5M which denotes a 50% year-on-year growth. This revenue surpassed BTIG’s estimates and aligned with consensus estimates. Furthermore, Avita reiterated its FY23 guidance of revenue in the range of $51M-$53M.
Zimmerman also took into account Avita’s recent debt financing agreement, which provides the company with up to $90M to support growth as it ventures into the full-thickness skin defect market. Despite facing certain challenges with the FDA regarding their RECELL Go device, initial feedback on Avita’s new market entry has been positive. Moreover, a recent survey indicated that the use of RECELL is expected to increase significantly in the coming months. These factors contributed to Zimmerman’s Buy rating and $26 price target for Avita Medical’s stock."| 1 | | AUS Analysts | Price Target | Upside Potential (AVH: .25) |
|---|
| 2 | Bell Potter | $6.85 | 111% |
|---|
| 3 | Morgans | $6.74 | 107% |
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| 4 | MST | $9.25 | 185% |
|---|
| 5 | Wilsons | $6.34 | 95% |
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| 6 | Morningstar | $5.60 | 72% |
|---|
ScoPo’s Powerplay – Strong Q3 FY23 results forecast for Avita
Regenerative medicine and wound care and company Avita Medical (ASX:AVH) is Power’s pick of the week. AVH is due to release its Q3 FY23 results on November 10.
AVH earlier announced it had hit its Q3 FY23 revenue guidance of US$13.5 million and confirmed full year guidance of US$51-$53 million.
Additionally debt funding of US$90 million has been secured with OrbiMed to execute strategic growth initiatives.
Power says achievement of revenue guidance is a positive and shows sales momentum is continuing.
“More detail will be provided at the Q3 results briefing,” he says.
The debt funding to execute of strategic objectives is believed to include regional expansion, launch of automated device RECELL- GO and launch into expanded soft tissue markets.
“The market should also view the aim of achieving profitability in CY25 as a positive,” Power says.
Morgans has an Add rating and 12-month target price of $6.74 for AVH.
Once we have clarity around the rationale of the debt facility and the "strategic growth initiatives", FDA review, EPS guidance (at least, confirmation that the exp/rev ratio improves from Q4), 2025 profitability, sales expectations with RECELL (still thinking 70%+ growth over prior corresponding quarter for Q4 and 2024), VAC approval progress, etc; I think there's a good chance these updates will be positive (at least not as bad as the market has priced in) and the share price will make its way back up to $6 AVH / $20 RCEL in under 6 months, then get re-rated in May-July if all goes well.
Just my thoughts, as you say, they're worth what you paid 
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