Craig-Hallum bullish on MDxHealth, initiates with a Buy

As previously reported, Craig-Hallum analyst William Bonello initiated coverage of MDxHealth (MDXH) with a Buy rating and $8 price target The firm notes MDxHealth has the only test to evaluate the risk of undetected cancer in men with a negative biopsy. It also has a test to determine whether men classified as having low-risk cancer actually have more aggressive cancer that needs to be treated. The first test has a $500M TAM that is less than 10% penetrated, and the second test has a $600M TAM that is just 40% penetrated. Craig-Hallum is looking for 20%-plus topline growth with EBITDA breakeven this quarter, with the potential for mid-teens margins in a couple of years. The company has beaten top-line estimates in each of the past nine quarters, and also trades at less than 2-times this year’s revenue – which is a steep discount to the group.