Piper Sandler reiterates Kestra Medical stock rating after results

Piper Sandler has maintained an Overweight rating on Kestra Medical Technologies (NASDAQ:KMTS) with a $30.00 price target, citing a potential 25% upside from the current $24 share price. Analyst consensus favors a Strong Buy rating with targets between $28 and $32. The firm highlighted robust first-quarter results, surpassing revenue expectations and achieving strong gross margins.

Sales guidance for 2027 was increased, signaling anticipated growth later in the year. Management raised their intermediate-term gross margin outlook for the next two to three years to the mid-70% range, reflecting improved network mix and reduced cost per fit. Kestra Medical holds more cash than debt on its balance sheet, offering financial flexibility for growth.

The company projects EBITDA leverage to emerge in fiscal years 2028 and 2029. Piper Sandler views the stock as trading at a premium to peers due to its strong growth profile and expected margin leverage in the years ahead. Kestra Medical reported its Q1 2027 results, with revenue of $31 million, a 60% increase year-over-year and exceeding estimates by $2 million.

Despite this strong revenue growth, the company reported a larger-than-anticipated loss of $0.75 per share, compared to the expected $0.45 loss. Gross margins improved to 56.5%, and management raised full-year revenue guidance to $141 million. Stifel echoed Piper Sandler's positive outlook, maintaining a Buy rating with a $30.00 price target.

These developments underscore ongoing demand for Kestra's products and a positive outlook from analysts.