Oppenheimer has initiated coverage on Silk Road Medical Inc (NASDAQ:SILK) with an Outperform rating and price target of $30.
Analysts Suraj Kalia and Shaymus Contorno note that Silk Road Medical has been at the forefront of introducing the Transcarotid Artery Revascularization (TCAR) method, an innovative procedure for stroke prevention in patients with carotid stenosis.
Since its approval in 2015, SILK’s revenues have grown impressively, with a four-year CAGR of 42%, leading to yearly sales of around $182 million and capturing about 15% of the market.
However, a CMS proposal in July 2023, aiming for equal reimbursement for TCAR and another method, has led to a revision in SILK’s projections. Based on the analysts’ research, this will have a short-lived impact, with TCAR’s longer-term potential remaining promising, leading to its positive view.
The previously held belief of TCAR’s superiority over transfemoral carotid stenting (TFCAS) is now being questioned.
Results from the CREST-2 study, comparing optimal medical therapy (OMT) with carotid endarterectomy (CEA) and CAS for patients without symptoms, are anticipated in CY26.
If OMT performs similarly, it might lead to a decline in referrals.
Price Action: SILK shares are up 3.33% at $19.22 on the last check Wednesday.
