Piper Starts Invuity At Overweight, Sees 'Superior' Technology And $4B Market Opportunity

In a report published Monday, Piper Jaffray analyst Matt O Brien initiated coverage of INVUITY INC IVTY with an Overweight rating and a price target of $18. Invuity's growth is expected to be driven by the acceptance of the Intelligent Photonics technology, which offers surgeons better visualization during MIS cases, and the annuity sales model. The company's annuity sales process allows for new business wins and leaner salesforce once it matures. "Unlike other med tech sales reps, Invuity's reps do not have to be in every surgery, freeing up time for prospecting and new businesses wins. In our view, once a mature company, this sales rep model will allow the company to operate with a smaller sales force compared to other med tech companies, leading to greater profitability down the road," analyst Matt O' Brien wrote. Invuity's market opportunity is estimated at $2 billion in the US and $4 billion worldwide. In the report Piper Jaffray noted, "The applications and procedures that could benefit from Invuity's technology are broad range (breast, orthopedics, general surgery), providing a diverse market opportunity mitigating concentration risk." Invuity's shares have appreciated 16 percent since its IPO and the valuation is expected to expand further with increased adoption of the company's technology and accelerating revenues.