Global Obesity Trends And Telemedicine Will Accelerate Non-invasive Weight Loss

Key Takeaways

• Combination therapy and pipeline innovation position the company to become the leading non-invasive obesity solution with resilient, high-margin recurring revenues.
  
• Accelerated regulatory milestones and expanding global reimbursement could rapidly scale adoption, revenue diversification, and earnings beyond initial expectations.
  
• Allurion faces challenges from pharmaceutical competition, regulatory hurdles, product concentration risk, economic barriers to adoption, and dependence on volatile international markets.

Catalysts

Focuses on ending obesity with a weight loss platform to treat people who are overweight.

• While analyst consensus expects improved procedure volumes from pairing Allurion's Balloon with low-dose GLP-1s, this may significantly understate the scale and speed of market adoption as combination therapy is poised to capture a far greater share of patients abandoning standalone GLP-1s, transforming Allurion into the dominant non-invasive solution and rapidly multiplying revenues.
  
• Analysts broadly agree that FDA approval and U.S. launch by 2026 will be meaningful, but the strength of the AUDACITY data, high unmet need, and possibility for earlier-than-expected approval could catalyze a U.S. launch as soon as late 2025, unlocking a multi-billion-dollar annual sales opportunity with premium pricing and positive operating leverage.
  
• Allurion's pipeline innovation-specifically, the development of a GLP-1 drug-eluting intragastric balloon-could leapfrog current obesity devices and pharmaceuticals, securing a unique intellectual property moat and driving industry-leading operating margins alongside durable recurring revenue streams.
  
• As non-invasive, cost-effective obesity treatments gain momentum with insurers and government health systems worldwide, possible shifts to national reimbursement, particularly in key European and emerging markets, could drive a step-change in patient access and sustained double-digit top-line growth.
  
• The global growth in healthcare consumerism, rising urbanization, and expanding emerging markets presence will allow Allurion to accelerate international adoption, diversify revenue sources, and scale its business model far beyond initial U.S. projections, materially boosting long-term earnings.

Allurion Technologies Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Allurion Technologies compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Allurion Technologies's revenue will grow by 9.7% annually over the next 3 years.
• Even the bullish analysts are not forecasting that Allurion Technologies will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Allurion Technologies's profit margin will increase from -153.9% to the average US Consumer Services industry of 11.7% in 3 years.
• If Allurion Technologies's profit margin were to converge on the industry average, you could expect earnings to reach $3.1 million (and earnings per share of $0.34) by about September 2028, up from $-30.7 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 66.5x on those 2028 earnings, up from -0.5x today. This future PE is greater than the current PE for the US Consumer Services industry at 18.6x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Allurion Technologies Future Earnings Per Share Growth

Risks

• Growing global adoption and rapid innovation in pharmaceutical anti-obesity solutions like GLP-1 drugs could continue to erode demand for device-based interventions such as Allurion's, weighing on future revenue growth and market share.
  
• Increasing regulatory scrutiny and approval delays for medical devices in the U.S. and abroad may push out or restrict new launches and require costly compliance, compressing gross margins and delaying top line expansion.
  
• Allurion's dependence on a narrow product pipeline-with most revenue tied to its intragastric balloon system-leaves the company vulnerable to adverse clinical outcomes, negative study data, or the emergence of superior alternatives, posing a long-term risk to both revenue stability and earnings predictability.
  
• Persistent economic inequality and out-of-pocket nature of Allurion's therapy could limit addressable markets, especially as healthcare systems and insurers place greater emphasis on cost containment, which could further reduce procedure volumes and pressure revenue.
  
• Heavy reliance on international markets for the majority of revenue increases exposure to foreign exchange volatility, localized regulatory disruptions, and potential geopolitical instability, all of which could unpredictably affect quarterly revenue and earnings quality for the company.

Valuation

• The assumed bullish price target for Allurion Technologies is $16.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Allurion Technologies's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $16.0, and the most bearish reporting a price target of just $2.5.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $26.3 million, earnings will come to $3.1 million, and it would be trading on a PE ratio of 66.5x, assuming you use a discount rate of 12.3%.
• Given the current share price of $2.16, the bullish analyst price target of $16.0 is 86.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.