Penumbra (PEN) Stock Forecast & Price Target

Penumbra has demonstrated notable gross margin improvement, with its non-GAAP gross margin rising from 63% in 2022 to approximately 67% in 2025, and management projecting further growth to around 70% by the end of 2026. The company's non-GAAP operating margin has also significantly increased from 2% in 2023 to about 14% in 2025, driven by enhancements in gross margin and effective SG&A management. With the anticipated rise in revenue and EPS estimates for 2026, as well as the potential for accelerated operating margin improvement, Penumbra is well-positioned for robust financial performance moving forward.

Penumbra is facing significant challenges, with an estimated $40 million revenue headwind from its operations in China, impacting its revenue growth by approximately 4% in both 2024 and 2025. The company anticipates that lower-than-expected contributions from new products and slower profitability improvements could result in revenue growth dropping to 14% or less, affecting its long-term valuation. Further risks include increased competition, potential delays in product approvals, and declining physician interest due to reimbursement pressures, all of which contribute to a negative outlook for Penumbra's stock.