Needham analyst Michael Matson reiterated a Buy rating on OrthoPediatrics today and set a price target of $26.00.
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Michael Matson has given his Buy rating due to a combination of factors that suggest potential growth and stability for OrthoPediatrics. Despite a slight miss in adjusted EBITDA consensus for the third quarter of 2025, the company maintained its revenue and adjusted EBITDA guidance for the year. Management’s confidence in achieving positive free cash flow in the fourth quarter of 2025 and reaching break-even in 2026 further supports a positive outlook.
Additionally, while revenue growth slowed to 12% in the third quarter from 16% in the second quarter, this was primarily due to lower sales in the 7D segment. Excluding these sales, revenue growth would have been approximately 17%, indicating underlying strength. The improvement in gross and adjusted EBITDA margins also reflects operational efficiency. Although the revenue growth forecast has been adjusted, it is seen as conservative, suggesting room for potential upside, which justifies the Buy rating.
Matson covers the Healthcare sector, focusing on stocks such as Boston Scientific, Penumbra, and TransMedics Group. According to TipRanks, Matson has an average return of -2.3% and a 41.48% success rate on recommended stocks.