Our Stock of the Week is MiMedx Group, Inc. (MDXG), a leader in placental biologics. It develops medical products that work as a skin substitute or “tissue allografts” to promote wound healing and reduce inflammation. The market is rapidly growing as it proves effective in treating severe burns and accelerating surgical recoveries. The Company recently announced that it is exiting the Knee Osteoarthritis and Regenerative Medicine programs to focus on the core Wound and Surgical business. This has improved cash flow and puts the Company on track to profitability.
In its most recent quarter, MDXG saw revenue grow 22% and had breakeven profitability. The Company said: “Based upon the strong commercial momentum in the business on a year-to-date basis, MIMEDX expects full year 2023 net sales growth in the mid-to-upper teens as a percentage, driven by continued demand for the Company’s Wound & Surgical product offering across its sites of service, and ongoing uptake of new products launched in the last twelve months. Additionally, based partly on the financial benefits associated with the Company’s recently announced strategic realignment, Adjusted EBITDA margin in the second half of 2023 is expected to exceed 20%.”
Current estimates show the company earnings $0.08 for the calendar year 2023, boosting that to $0.30 in 2024. Three analysts have buy ratings on the stock with targets of $11, $12, and $14.
This is a thin stock and is unlikely to do much in the current poor market for small caps, but we want to put it on the radar as a potential opportunity should it pull back deeper due to illiquidity.
Technically, the stock is holding up quite well and is near the bottom of its trading range of $7.25. As always, we will not chase the stock on Monday morning but will look to aggressively trade it as conditions develop.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in MDXG. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
