Evaluating AVITA Medical (RCEL) Valuation Following CE Mark Approval for RECELL GO in Europe

If you have been watching AVITA Medical (RCEL) lately, the latest news may have you wondering whether there is an inflection point in play. The company just received CE Mark approval for its RECELL GO device, opening the door to commercialize in Europe and other CE-recognizing markets. For anyone tracking biotech names, this regulatory milestone is meaningful as it could widen AVITA’s footprint well beyond the United States, tapping directly into new international demand for advanced wound care solutions.

This event comes after a volatile stretch for AVITA Medical. Recently, the share price surged by 35% as markets processed the wider European opportunity, but this follows a period where momentum was subdued, with the stock still down 39% over the past year. While annual revenue and net income are showing double-digit growth, earlier setbacks such as regulatory backlogs in the U.S. kept optimism in check. Now, with regulatory uncertainty easing in Europe, some investors are eyeing renewed momentum.

So after this past year’s swings, is AVITA Medical setting up for a comeback, or is the market already banking on future growth in its valuation?

Most Popular Narrative: 24.3% Undervalued

The leading narrative suggests AVITA Medical’s shares are trading significantly below fair value, driven by ambitious projections for revenue and earnings growth amid ongoing operational shifts.

Launch and rapid initial uptake of Cohealyx and PermeaDerm, supported by their integration with RECELL in a comprehensive wound care portfolio, positions AVITA to capture new indications and patient segments beyond burns (such as trauma), increasing the company's total addressable market and diversifying future revenue streams.

Why is Wall Street betting on a turnaround for AVITA Medical? The real excitement lies in powerful growth forecasts plus a future profit multiple that could redefine the company's valuation. Want to understand the bold assumptions at the core of this story? Dig deeper to uncover what is fueling this calculated optimism.

Result: Fair Value of $8.26 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing reimbursement challenges and heavy reliance on RECELL could quickly undermine the bullish thesis if persistent adoption and payment issues continue.

Find out about the key risks to this AVITA Medical narrative.

Another View: SWS DCF Model

Not everyone agrees with the optimism of price-based comparisons. Our DCF model also suggests AVITA Medical is undervalued, but it weighs future cash flows and company fundamentals rather than just market multiples. Could this be the more reliable benchmark as conditions shift?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AVITA Medical for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own AVITA Medical Narrative

If you see the story differently or want to chart your own course, you can explore the numbers and shape your own narrative in just a few minutes. Do it your way.

A great starting point for your AVITA Medical research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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