ANGO - Penumbra Off And Running On Renewed Enthusiasm For Mechanical Thrombectomy

2025-03-12 21:00:04 ET

Summary

• Penumbra's shares have surged again on renewed confidence in mechanical thrombectomy growth and a competitor's acquisition, but the current valuation is high at over 7x 2025 revenue estimate.
• Penumbra's thrombectomy business grew significantly in Q4'24, with U.S. revenue up 27% and venous revenue up 40%, driven by ongoing market penetration and share gains.
• Future growth looks promising with new products like Thunderbolt in stroke thrombectomy and ongoing penetration of other mechanical thrombectomy markets, but Stryker's Inari remains a formidable rival.
• Despite strong growth prospects, Penumbra's current valuation already reflects these expectations, making it a less than ideal candidate for GARP-type investors.

Even the best growth stories will occasionally see periods where a company’s growth momentum slows a bit and the Street starts questioning the valuation and growth assumptions. Such was the case with Penumbra ( PEN ) in the summer of 2024, but renewed confidence in the long-term growth opportunities in mechanical thrombectomy and the company’s ability to gain share, as well as a competitor’s acquisition at an attractive price, have reinvigorated the shares....

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