NEW YORK – TD Cowen said on Wednesday that it has initiated coverage of MDxHealth with an Outperform rating of its stock and a price target of $7.
In a note to investors, analyst Dan Brennan highlighted the company's portfolio of tests across the prostate cancer continuum, covering cancer screening, diagnosis, and treatment.
He estimated that MDxHealth stands to serve a total addressable market of over $2 billion that TD Cowen views as "fairly under-penetrated." Brennan also noted that with its acquisition of the Oncotype DX Genomic Prostate Score test from Exact Sciences last year, the company "effectively doubled its revenue base and sales force."
Brennan said that TD Cowen surveyed 25 urologists and consulted multiple opinion leaders in the field as part of its due diligence. The responses indicated attractive market growth opportunities for MDxHealth, given both test adoption and prostate cancer population trends.
He also said the company's stock position relative to its peers represents an "attractive entry point."
According to Brennan, TD Cowen sees a path for the company to "high-teens revenue growth" under its current management, led by CEO Mike McGarrity, though he said there are still risks to investors, including from competitors in the prostate cancer space, some of which are significantly larger than MDxHealth.