Analyst Stephen Brozak of WBB Securities maintained a Buy rating on Celularity, retaining the price target of $6.00.
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Stephen Brozak has given his Buy rating due to a combination of factors that position Celularity favorably in the market. One of the primary reasons is the recent change by the Centers for Medicare & Medicaid Services (CMS) to a fixed reimbursement rate for stem cell-derived skin substitute products. This change is expected to disrupt the industry, which is characterized by high costs of goods, but provides Celularity with a unique advantage due to its leading production capacity. This allows the company to maintain profitability where others might struggle.
Additionally, Celularity has undertaken significant financial restructuring, including a sale-leaseback of its patent portfolio, which raised nearly $34 million, and the elimination of all senior debt. This has significantly strengthened its balance sheet and improved liquidity. The company has also streamlined its operations by creating subsidiaries for each business unit and has regained compliance with NASDAQ listing requirements. These strategic moves, combined with the company’s ability to leverage its biomaterials group, underpin Brozak’s optimistic outlook and the Buy rating with a 12-month price target of $6.00.