ESTA Stock Forecast & Price Target

Establishment Labs Holdings Inc. has demonstrated a notable improvement in financial performance, highlighted by a substantial increase in gross margin to 70.1%, which is 620 basis points higher year-over-year, primarily due to the successful launch of Motiva implants in the US market. The company's adjusted EBITDA margin has turned positive for the first time, rising to 2.2%, representing a remarkable 1,960 basis points year-over-year increase, and exceeding previous consensus expectations significantly. Additionally, US revenue growth of approximately 16% sequentially underscores the positive momentum of Motiva sales, further supported by a 15% year-over-year increase in procedure volumes among practices offering the product.

Establishment Labs Holdings Inc faces a negative outlook primarily due to anticipated revenue growth decreasing to less than 20%, attributed to disappointing U.S. sales and slow progress towards profitability. Furthermore, international growth has significantly slowed, with estimates projecting only 2% growth for 2023, a decline in 2024, and marginal growth in 2025, exacerbating concerns about the company's long-term prospects. Additionally, the high SG&A expenditure ratio at 69.1% of sales and the potential risks from a dilutive equity offering further contribute to the bearish sentiment surrounding the company's financial health.