We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
I last wrote about Lantheus ((LNTH - Free Report) ) as the Bull of the Day in March after their stunning Q4’22 report that caught Wall Street off-guard and moved estimates significantly higher.
Well the company just did it again with their Q1 report that delivered another beat-and-raise in May, and drove shares to new all-time highs.
In this report, I’ll review those results and the new potential headwind that caused the stock to sell off from $100.
Lantheus is a $5.7 billion provider of medical imaging technologies (think nuclear agents) for the diagnosis of cardiovascular and other diseases. But their new blockbuster application is in prostate cancer detection.
Here's how the company, which was added to the S&P 400 Midcap Index in October, describes their business...
We are an established leader in the development, manufacture and commercialization of pioneering diagnostic and therapeutic products and artificial intelligence (AI) solutions. Our broad portfolio features:
**Precision Diagnostics that Find and Follow diseases in non-oncologic conditions **Radiopharmaceutical Oncology diagnostic and therapeutic products that Find, Fight and Follow cancer **Strategic Partnerships that empower precision medicine through the use of biomarkers, digital solutions and radiotherapeutic platforms
PYLARIFY® (piflufolastat F 18) injection (also known as 18F-DCFPyL or PyL) is a fluorinated small molecule PSMA-targeted PET imaging agent that enables visualization of lymph nodes, bone and soft tissue metastases to determine the presence or absence of recurrent and/or metastatic prostate cancer.
And here's how they describe the benefits for doctors in diagnosing their patients...
For men with prostate cancer, PYLARIFY combines the accuracy of PET imaging, the precision of PSMA targeting and the clarity of an F 18 radioisotope. This combination brings superior diagnostic performance in assessing patients with suspected metastasis for initial definitive therapy or suspected recurrence based on elevated PSA, allowing you to better assess your patients’ disease status.
Beat and Raise, All-Time Highs
I own this maker of medical diagnostics in the Zacks Healthcare Innovators portfolio, so we keep a pretty close eye on the fundamentals and investor reaction.
The stock became a Zacks #1 again in June because they just keep raising guidance this year. In early May, Lantheus delivered Q2 earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.29 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 13.95%. A quarter ago, it was expected that this diagnostic imaging company would post earnings of $0.96 per share when it actually produced earnings of $1.37, delivering a surprise of 42.71%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Lantheus Holdings, which belongs to the Zacks Medical - Products industry, posted revenues of $300.78 million for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 7.17%. This compares to year-ago revenues of $208.88 million. The company has topped consensus revenue estimates four times over the last four quarters.
After these results and raised guidance, the analyst consensus for both top and bottom lines move higher. Full-year 2023 sales are projected to cross $1.25 billion, representing 34.6% growth.
And EPS estimates jumped over 10% from $4.95 to $5.60, for a 32.7% advance. All this optimism drove LNTH shares to all-time highs in May above $100.
Competition in PSMA PET Imaging
But LNTH sold off sharply in late May after a competitor got approval for a prostate agent similar to Pylarify. I think this drop back to the low $80s presents another chance for smart investors to get in.
Because from all I've read about sales projections, the TAM (total addressable market), and company market share, Lantheus should maintain the lead position in PSMA PET imaging, a procedure that is used to help find prostate cancer cells in the body. For this procedure, a cell-targeting molecule linked to a radioactive substance is injected into the body and travels through the blood.
PSMA stands for prostate-specific membrane antigen. And PET, you may know, is short for positron emission tomography.
Pylarify PSMA PET/CT Scan is a cutting-edge nuclear medicine that has been proven to be exceptionally sensitive for detecting prostate cancer using PET imaging exams. PYLARIFY® combines accurate PET imaging, precise PSMA targeting, and clarifying Fluorine-18 (F-18) to improve prostate cancer assessment.
Here was recent commentary from the analyst team at Truist after they attended the Society of Nuclear Medicine & Molecular Imaging in Chicago last week. The conference has a heavy focus on the use of PET imaging in oncology, and PSMA PET was a major focus.
“We came away from the conference incrementally positive on PSMA PET volumes into 2Q and on the continued runway for imaging TAM expansion. Feedback we received from docs on POSLUMA, Bracco’s (Private) recently approved imaging agent, was mixed, and we continue to feel that our forward market share assumptions, where Pylarify roughly splits the F-18 segment of the market, may be overly conservative.”
The Truist team also believes that LNTH, at current levels, is not getting adequate investor attention for the collective value of its business segment opportunities, which they see worth $125 per share and higher “on a probability-weighted basis.”
They also think the new F-18 competition from Bracco is already well-contemplated in their base case estimates -- “we may even give Bracco too much share capture credit in our 2024-2026 base case assumptions.”
Even if Bracco were to secure 40%+ share in an expanding F-18 PSMA PET imaging market over the next 3 years, the Truist team still thinks Pylarify and Lantheus are undervalued, especially with the stock under $85.
Bottom line on LNTH: The last time the bears discounted the sales potential of Lantheus, the stock bit back with a 100% move from $50 to $100. I’m not expecting those kind of fireworks again, but I think the risk/reward is very attractive near $80, given the Truist market analysis and $125 price target.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bull of the Day: Lantheus (LNTH)
I last wrote about Lantheus ((LNTH - Free Report) ) as the Bull of the Day in March after their stunning Q4’22 report that caught Wall Street off-guard and moved estimates significantly higher.
Well the company just did it again with their Q1 report that delivered another beat-and-raise in May, and drove shares to new all-time highs.
In this report, I’ll review those results and the new potential headwind that caused the stock to sell off from $100.
Lantheus is a $5.7 billion provider of medical imaging technologies (think nuclear agents) for the diagnosis of cardiovascular and other diseases. But their new blockbuster application is in prostate cancer detection.
Here's how the company, which was added to the S&P 400 Midcap Index in October, describes their business...
We are an established leader in the development, manufacture and commercialization of pioneering diagnostic and therapeutic products and artificial intelligence (AI) solutions. Our broad portfolio features:
**Precision Diagnostics that Find and Follow diseases in non-oncologic conditions
**Radiopharmaceutical Oncology diagnostic and therapeutic products that Find, Fight and Follow cancer
**Strategic Partnerships that empower precision medicine through the use of biomarkers, digital solutions and radiotherapeutic platforms
PYLARIFY® (piflufolastat F 18) injection (also known as 18F-DCFPyL or PyL) is a fluorinated small molecule PSMA-targeted PET imaging agent that enables visualization of lymph nodes, bone and soft tissue metastases to determine the presence or absence of recurrent and/or metastatic prostate cancer.
And here's how they describe the benefits for doctors in diagnosing their patients...
For men with prostate cancer, PYLARIFY combines the accuracy of PET imaging, the precision of PSMA targeting and the clarity of an F 18 radioisotope. This combination brings superior diagnostic performance in assessing patients with suspected metastasis for initial definitive therapy or suspected recurrence based on elevated PSA, allowing you to better assess your patients’ disease status.
Beat and Raise, All-Time Highs
I own this maker of medical diagnostics in the Zacks Healthcare Innovators portfolio, so we keep a pretty close eye on the fundamentals and investor reaction.
The stock became a Zacks #1 again in June because they just keep raising guidance this year. In early May, Lantheus delivered Q2 earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.29 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 13.95%. A quarter ago, it was expected that this diagnostic imaging company would post earnings of $0.96 per share when it actually produced earnings of $1.37, delivering a surprise of 42.71%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Lantheus Holdings, which belongs to the Zacks Medical - Products industry, posted revenues of $300.78 million for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 7.17%. This compares to year-ago revenues of $208.88 million. The company has topped consensus revenue estimates four times over the last four quarters.
After these results and raised guidance, the analyst consensus for both top and bottom lines move higher. Full-year 2023 sales are projected to cross $1.25 billion, representing 34.6% growth.
And EPS estimates jumped over 10% from $4.95 to $5.60, for a 32.7% advance. All this optimism drove LNTH shares to all-time highs in May above $100.
Competition in PSMA PET Imaging
But LNTH sold off sharply in late May after a competitor got approval for a prostate agent similar to Pylarify. I think this drop back to the low $80s presents another chance for smart investors to get in.
Because from all I've read about sales projections, the TAM (total addressable market), and company market share, Lantheus should maintain the lead position in PSMA PET imaging, a procedure that is used to help find prostate cancer cells in the body. For this procedure, a cell-targeting molecule linked to a radioactive substance is injected into the body and travels through the blood.
PSMA stands for prostate-specific membrane antigen. And PET, you may know, is short for positron emission tomography.
Pylarify PSMA PET/CT Scan is a cutting-edge nuclear medicine that has been proven to be exceptionally sensitive for detecting prostate cancer using PET imaging exams. PYLARIFY® combines accurate PET imaging, precise PSMA targeting, and clarifying Fluorine-18 (F-18) to improve prostate cancer assessment.
Here was recent commentary from the analyst team at Truist after they attended the Society of Nuclear Medicine & Molecular Imaging in Chicago last week. The conference has a heavy focus on the use of PET imaging in oncology, and PSMA PET was a major focus.
“We came away from the conference incrementally positive on PSMA PET volumes into 2Q and on the continued runway for imaging TAM expansion. Feedback we received from docs on POSLUMA, Bracco’s (Private) recently approved imaging agent, was mixed, and we continue to feel that our forward market share assumptions, where Pylarify roughly splits the F-18 segment of the market, may be overly conservative.”
The Truist team also believes that LNTH, at current levels, is not getting adequate investor attention for the collective value of its business segment opportunities, which they see worth $125 per share and higher “on a probability-weighted basis.”
They also think the new F-18 competition from Bracco is already well-contemplated in their base case estimates -- “we may even give Bracco too much share capture credit in our 2024-2026 base case assumptions.”
Even if Bracco were to secure 40%+ share in an expanding F-18 PSMA PET imaging market over the next 3 years, the Truist team still thinks Pylarify and Lantheus are undervalued, especially with the stock under $85.
Bottom line on LNTH: The last time the bears discounted the sales potential of Lantheus, the stock bit back with a 100% move from $50 to $100. I’m not expecting those kind of fireworks again, but I think the risk/reward is very attractive near $80, given the Truist market analysis and $125 price target.