Market Overview

EnteroMedics Cut By Roth Capital On Utilization Growth

Share:
EnteroMedics Cut By Roth Capital On Utilization Growth

Roth Capital Partners analyst Chris Lewis has downgraded EnteroMedics Inc (NASDAQ: ETRM) shares to a Neutral rating from Buy citing lack of reimbursement limits and commercial adoption or utilization growth. The firm has a 12-month price target of $0.50 on the stock.

The analyst said, "While we believe ETRM's vBloc therapy can still become a viable 'tool in the toolbox' within the obesity treatment paradigm over the longer-term, we are scaling back our utilization assumptions over the coming years as ETRM works towards securing expanded reimbursement, which will ultimately drive increased adoption and utilization, in our view. As a result, we are shifting to Neutral, from Buy, and will look for expanding reimbursement and more meaningful procedural volumes to gain higher conviction on the name."

Related Link: EnteroMedics Announces Exclusive Federal Government Business Channel Sales Agreement With Academy Medical

The brokerage continued that given the minimal adoption of EnteroMedics since its commercial launch in 2Q15, the analyst is "scaling back" the utilization assumptions going forward, "as ETRM works towards getting expanded reimbursement." Lewis believes such activity would finally drive increased adoption and utilization.

Roth Capital Partners thinks until then, the commercial adoption, procedure volumes and sales "will be controlled," as the company will continue to face a challenging battle in competing with the current alternative options like a gastric sleeve and lap band. The brokerage thinks these devices "have already established reimbursement, clinical acceptance and offer more pronounced efficacy."

Therefore, Lewis is looking for expanding reimbursement coverage and more meaningful procedural volumes and associated growth to gain higher conviction on the name.

At time of writing, EnteroMedics was trading up 4.38 percent in Thursday's pre-market session.

Latest Ratings for ETRM

DateFirmActionFromTo
May 2017Initiates Coverage OnBuy
Jun 2016DowngradesBuyNeutral
Oct 2013Initiates Coverage onBuy

View More Analyst Ratings for ETRM
View the Latest Analyst Ratings

Posted-In: Chris Lewis ROTH Capital PartnersAnalyst Color Downgrades Price Target Analyst Ratings Trading Ideas

 

Related Articles (ETRM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
IINDoughertyAssumes34.0
PNRJefferiesInitiates Coverage On
YYUBSUpgrades
ROKUOppenheimerMaintains155.0
IPHIBank of AmericaMaintains80.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Genesee & Wyoming May Traffic Falls 3.8%

Citi Upgrades Qorvo On Improved Execution