Rising Demand For Minimally Invasive Care Will Expand Med Tech

Key Takeaways

• Growing global demand for minimally invasive therapies, clinical validation, and regulatory progress are set to expand product adoption and boost revenue and margins.
  
• International expansion and operational cost savings initiatives will diversify revenue streams, reinforce profitability, and drive sustained growth across key Med Tech segments.
  
• Reliance on few proprietary technologies, regulatory delays, reimbursement uncertainty, and tariff exposure create significant risks to growth, margins, and market position.

Catalysts

A medical technology company, engages in the design, manufacture, and sale of medical, surgical, and diagnostic devices for the use in treating peripheral vascular disease, and oncology and surgical settings in the United States and internationally.

• Substantial revenue growth is expected as aging populations and rising global rates of chronic diseases like cancer and vascular disorders continue to drive heightened demand for minimally invasive treatments, directly increasing AngioDynamics' addressable markets for solutions such as Auryon, NanoKnife, and thrombectomy platforms.
  
• Ongoing clinical validation, expanding regulatory approvals, and upcoming reimbursement enhancements (notably the new CPT codes for NanoKnife prostate and pancreatic cancer procedures effective 2026 and 2027) are set to accelerate adoption of innovative, higher-margin products, positively impacting both revenue and net margins over the next several years.
  
• The expanding footprint in international markets, recently bolstered by CE Mark approval for Auryon and AlphaVac, opens up new high-growth geographies and distribution channels, supporting sustained double-digit Med Tech segment growth and providing additional sources of revenue diversification.
  
• Operational improvements and cost optimization initiatives-including completion of the current manufacturing transition-are anticipated to deliver ~$15M in annualized savings by FY27, which will further enhance gross margins and EBITDA, even as tariff headwinds persist.
  
• Increased adoption and cross-selling within outpatient/ambulatory settings, driven by patient and provider preference and supported by AngioDynamics' broadened Med Tech portfolio, is expected to reinforce recurring disposable sales and boost overall revenue predictability and profitability.

AngioDynamics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming AngioDynamics's revenue will grow by 6.6% annually over the next 3 years.
• Analysts assume that profit margins will increase from -11.6% today to 3.1% in 3 years time.
• Analysts expect earnings to reach $11.0 million (and earnings per share of $0.26) by about July 2028, up from $-34.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 84.9x on those 2028 earnings, up from -10.9x today. This future PE is greater than the current PE for the US Medical Equipment industry at 31.1x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.11%, as per the Simply Wall St company report.

AngioDynamics Future Earnings Per Share Growth

Risks

• The company's exposure to unpredictable and escalating tariffs, particularly impacting its Med Tech segment, introduces significant cost uncertainty that could pressure gross margins, EBITDA, and net earnings over the long term if such regulatory trends persist or worsen.
  
• AngioDynamics currently faces regulatory delays and ambiguity in its plan to add a blood return feature to AlphaVac; extended time-to-market or required clinical trials could constrain innovation pace and cede competitive ground, thereby hampering top-line growth and market share in its thrombectomy segment.
  
• The company's future growth in key products such as NanoKnife is heavily reliant on obtaining broad reimbursement coverage and adoption, yet the U.S. reimbursement landscape is fragmented, rollouts may be slower than anticipated, and private payer decisions are uncertain, risking a slower uptick in utilization and revenue contribution.
  
• There is high dependence on a limited set of proprietary growth drivers-Auryon, NanoKnife, and mechanical thrombectomy-making AngioDynamics vulnerable to technology disruptions, competitive launches, or unfavorable clinical/reimbursement data in these segments, risking revenue volatility and concentration risk.
  
• While operational efficiency initiatives and manufacturing outsourcing are expected to yield cost savings, potential execution challenges, such as supply chain disruptions or integration complexity, could limit the realization of projected margin expansion and impact overall profitability.

Valuation

• The analysts have a consensus price target of $19.0 for AngioDynamics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $24.0, and the most bearish reporting a price target of just $16.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $354.4 million, earnings will come to $11.0 million, and it would be trading on a PE ratio of 84.9x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of $9.13, the analyst price target of $19.0 is 51.9% 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.