IRTC - iRhythm after Novitas update: Investors urged to 'prepare for a new reality'

Following a slight recovery yesterday, iRhythm Technologies (IRTC) has resumed its downtrend today after the ~32.9% decline last week in response to new rates published by Medicare Administrative Contractor Novitas Solutions.Supported by expert opinion, Oppenheimer analyst Suraj Kalia expects a rate cut of ~50 – 70%, cautioning investors ‘to prepare for a new reality of lower margins and lower growth.’ The analyst has rated the stock as perform.With a neutral rating and ~$170 price target, Baird analyst Mike Polark shares a similar view.Noting the management expectations over $300 as a floor, ‘we do not think those levels are likely,’ the analyst wrote to clients, projecting ‘one hundred something, say $150 at the midpoint’ as the likely Medicare rate.Last Friday, Needham reiterated its Hold rating on iRhythm, citing the reimbursement uncertainty.

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iRhythm after Novitas update: Investors urged to ‘prepare for a new reality’