Further Growth Projected At LabStyle Innovations

Rodman & Renshaw has maintained its Buy and $12 price target on LabStyle Innovations Corp (NASDAQ: DRIO) after the company's better-than-expected first quarter results.LabStyle Innovations reported lower-than-projected net loss of $0.33 per share versus the brokerage's estimate of $0.38 per share. Revenues of $568,000 were also slightly above the brokerage's projection of $556,000. As a result, the brokerage has narrowed its 2016 loss per share estimate to $1.50 from $1.53. LabStyle would benefit from the uptake of its Dario Smart Meter. LabStyle launched the Dario Diabetes Management Solution in the U.S. late in the first quarter of 2016, and has begun online sales in the U.S. along with a social media marketing campaign."In our view, if the company is able to successfully broaden its revenue mix into software and database access sales, our projections from both a top-and bottom-line standpoint could turn out to be extremely conservative," analyst Raghuram Selvaraju wrote in a note.Based on sales projected in type 1 diabetes (only 5 percent of the total diabetes population), the analyst estimates that Dario could generate peak annual product sales (based only on test strips) of roughly $90 million."We note that the software and database access revenue streams are likely to be significantly higher-margin than sales of the test strips," Selvaraju added.At the time of writing, shares of LabStyle were down 0.91 percent to $4.86.