Canaccord Starts Penumbra At Buy, Sees 'Stroke Of Genius'

• The share price of Penumbra, Inc. PEN has declined 5.23 percent over the past month, reaching a low of $38.90 on Monday.
• Canaccord Genuity’s Jason Mills has initiated coverage of the company with a Buy rating and price target of $48.
• Mills believes that Penumbra is very well positioned to benefit from the development and growth of the global interventional stroke market over the next several years.

According to the Canaccord Genuity report, “PEN possesses a rare combination of size, scale, compelling target markets, broad/differentiated product portfolio, and strong share positions for a small-cap med-tech company.”

Analyst Jason Mills also explained that the company has a robust margin profile and a “penchant” for profitability, and is expected to return to profitability soon, all of which differentiate Penumbra from its small cap med-tech peers.

In addition, the company has a strong, deep, tenured and successful leadership team. Since Penumbra’s inception in 2004, the management has “built a unique culture among its teammates that eschews internal politics, respects but challenges dogma, and prioritizes constant, expeditious innovation, both iterative and revolutionary,” Mills stated.

Mills also expects large cap med-tech companies to see Penumbra as an attractive acquisition target, although the company is expected to succeed as a stand-alone entity in the long term.

The company’s largest business, acute ischemic stroke, grew 46 percent in 2015 and 50 percent in the first half of 2015, following clinical trials that demonstrated the efficacy of Penumbra’s mechanical thrombectomy intervention.