Clinical Adoption And Global Expansion Will Redefine Healthcare

Key Takeaways

• Expanded reimbursement and increased adoption promise accelerated revenue growth and margin expansion, as Aquablation becomes a standard for minimally invasive therapy in more hospitals.
  
• International growth, successful clinical trials, and new approvals are unlocking additional long-term revenue streams and expanding market reach for sustained profitability.
  
• Heavy dependency on its core product, operating losses, modest market share, regulatory risks, and supply chain vulnerabilities threaten long-term growth and profitability.

Catalysts

A surgical robotics company, focuses on developing transformative solutions in urology in the United States and internationally.

• Recent assignment of a permanent CPT Category I code and a 5.6% increase in Medicare hospital facility reimbursement for Aquablation will materially reduce administrative hurdles, support broader clinical adoption, and improve patient access, setting the stage for an acceleration in procedure volumes and revenue growth in 2026 and beyond.
  
• The ongoing expansion of HYDROS robotic system placements into both high-volume and mid/lower volume hospitals, in conjunction with rising utilization by a growing base of engaged surgeons, indicates significant untapped market potential-driving recurring consumables revenue growth and eventual expansion in gross and operating margins.
  
• Robust procedure growth is underpinned by increasing surgeon adoption and a meaningful shift toward minimally invasive therapies, which aligns with broader healthcare trends and supports durable net revenue and margin expansion as clinical outcomes continue to validate Aquablation as standard of care.
  
• International revenue growth-particularly in key markets like the UK, Japan, and Korea-demonstrates early execution on geographic expansion, providing substantial new, long-term revenue streams and improved operational leverage that should enhance earnings power.
  
• Ongoing positive clinical trial progress (including WATER IV for prostate cancer) and anticipated future approvals for new indications will expand the total addressable market, catalyzing higher system placements, greater procedure volumes, and improved long-run profitability as new patient populations are reached.

PROCEPT BioRobotics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming PROCEPT BioRobotics's revenue will grow by 27.0% annually over the next 3 years.
• Analysts are not forecasting that PROCEPT BioRobotics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate PROCEPT BioRobotics's profit margin will increase from -30.6% to the average US Medical Equipment industry of 12.5% in 3 years.
• If PROCEPT BioRobotics's profit margin were to converge on the industry average, you could expect earnings to reach $70.4 million (and earnings per share of $1.05) by about September 2028, up from $-84.1 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 77.6x on those 2028 earnings, up from -25.0x today. This future PE is greater than the current PE for the US Medical Equipment industry at 28.6x.
• Analysts expect the number of shares outstanding to grow by 6.62% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.54%, as per the Simply Wall St company report.

PROCEPT BioRobotics Future Earnings Per Share Growth

Risks

• Heavy reliance on the HYDROS/Aquablation platform exposes PROCEPT to significant vulnerability should a competitor launch a more cost-effective or technologically advanced solution, risking future revenue diversification and long-term earnings stability.
  
• Continued operating losses and high R&D expenditure, despite improvements in gross margin, may hamper the company's ability to achieve sustainable profitability or positive net margins, particularly if revenue growth slows amid broader healthcare cost containment efforts.
  
• PROCEPT's limited installed base and modest 20% procedural share in the hospital market highlight early adoption risks-slower-than-expected conversion of new accounts to routine, high-volume use or failure to make Aquablation the standard of care could constrain recurring revenue growth.
  
• Regulatory changes or reimbursement pressures-including recent downward adjustments in urology physician fees-reflect a secular risk that government or insurer cost containment could limit broader procedure adoption, negatively impacting long-term revenue projections.
  
• Dependence on a sole-source supplier in China for key ultrasound components exposes the company to ongoing tariff risks, supply chain disruptions, and rising compliance/cybersecurity costs, which could compress gross margins and impair earnings, especially if onshoring or mitigation strategies prove costly or delayed.

Valuation

• The analysts have a consensus price target of $65.6 for PROCEPT BioRobotics 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 $85.0, and the most bearish reporting a price target of just $51.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $563.8 million, earnings will come to $70.4 million, and it would be trading on a PE ratio of 77.6x, assuming you use a discount rate of 7.5%.
• Given the current share price of $37.84, the analyst price target of $65.6 is 42.3% 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.