OrthoPediatrics (KIDS) Stock Forecast & Price Target

OrthoPediatrics Corp reported a strong increase in gross margin by 50 basis points year-over-year, alongside a notable improvement in adjusted EBITDA margin, which rose 280 basis points during the same period. The company experienced significant growth in Trauma & Deformity sales, rising 17.3% to $44.1 million, while demonstrating continued strength in its Scoliosis segment, indicating a solid operational performance amid challenging market conditions. Additionally, expectations of growing revenue driven by product introductions and enhanced operational efficiencies suggest a positive outlook for margins and cash flow in the long term.

OrthoPediatrics Corp faces potential headwinds regarding its revenue growth, which has slowed to 12.2% in 3Q25 from 15.7% in the previous quarter, indicating possible challenges in sustaining momentum in the pediatric orthopedic market. Additionally, recent acquisitions have not yielded anticipated sales results, and declining cash flow and margins have raised concerns about the company’s ability to manage cash burn effectively. Furthermore, reduced productivity gains among distributors and weaker performance from key product lines may further hinder the company’s financial stability, leading to lowered fiscal guidance for FY25.