IRTC - iRhythm Technologies: Reimbursement Blow Equals Shareholder Downside
- iRhythm Technologies' future operating model is in jeopardy following Novitas' recent announcement on ECG reimbursement rates.
- Around 27% of total sales is exposed to Medicare for iRhythm, thus ~30% of the top line remains unhedged to the downside going forward.
- Shares have given back all gains earned over the single-year period to date, and further downside seems imminent.
- We have cut our 2021 price target to $48, given uncertainty in sales multiples and the regulatory headwinds to top-line growth.
- Here, we cover the necessary components in the investment debate for the benefit of investors' own reasoning.
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iRhythm Technologies: Reimbursement Blow Equals Shareholder Downside