OrthoPediatrics (KIDS) Stock Forecast & Price Target

OrthoPediatrics Corp reported 4Q24 sales of $52.7 million, reflecting a year-over-year organic growth of approximately 22%, aligning with the company's prior estimates. The firm experienced significant increases in both Scoliosis and Trauma & Deformity sales, with Scoliosis revenue rising 61.8% to $15.6 million and Trauma & Deformity sales increasing 34.5% to $36.4 million, both surpassing earlier projections. With continued expansion in its product offerings and positive growth trends, including a forecasted "high-teens" organic growth starting in 1Q25, OrthoPediatrics appears well-positioned for sustained market share gains in the pediatric orthopedic sector.

OrthoPediatrics Corp's outlook is negatively influenced by a projected flat gross margin of 72%-73%, a decline from previous expectations, which raises concerns about profitability. The company faces risks related to slower revenue growth, disappointing sales from recent product acquisitions, and an operating margin of (26.7%), significantly below consensus estimates. Additionally, the reclassification of expenses has further eroded gross margins to 67.5%, contributing to an unsustainable cash burn and highlighting ongoing challenges in cost management and revenue generation.