Raymond James Downgrades Profound Medical to Outperform Amid Economic Uncertainty

Raymond James analyst Michael Freeman downgraded Profound Medical (PROF) to Outperform from Strong Buy with a new price target of $11, down from $17. Freeman remains confident in TULSA's candidacy as a standard-of-care procedure, but has reset his rating on peer multiple compression and economic uncertainty potentially impacting TULSA's adoption rate.

Raymond James analyst Michael Freeman has revised his outlook on Profound Medical (PROF, Financial), downgrading the rating to Outperform from a previous Strong Buy. The price target has been adjusted from $17 to $11, reflecting a significant reduction in the stock's valuation. The downgrade comes following a disappointing first-quarter performance and concerns over peer multiple compression and potential impacts from economic uncertainties.

Despite the setbacks, Freeman remains optimistic about the future of TULSA, a prostate disease treatment developed by Profound Medical. He highlights the increasing confidence in TULSA's safety and effectiveness, bolstered by favorable results from the CAPTAIN trial's Level 1 safety and efficacy data. However, Freeman acknowledges that economic uncertainties could affect the adoption rates of TULSA technologies in both private practices and larger institutions.

Based on Wall Street analysts' forecasts, the average target price for Profound Medical Corp (PROF, Financial) is $12.88, with a high estimate of $17.00 and a low estimate of $11.00. This implies an average upside of 180.81% from the current price of $4.59. The consensus recommendation from 5 brokerage firms is currently 1.4, indicating a "Buy" status [1].

GuruFocus estimates the GF Value for Profound Medical Corp (PROF, Financial) in one year to be $12.60, suggesting an upside of 174.81% from the current price of $4.585. GF Value is calculated based on historical multiples and future performance estimates [2].

Profound Medical Corp (PROF) reported a significant revenue increase of 82% in Q1 2025 compared to the same period in 2024. The company's gross margin improved to 71% in Q1 2025 from 60% in Q1 2024, indicating better cost management. The Tulsa Pro technology demonstrated strong clinical outcomes, including no blood loss and no overnight hospital stays, enhancing patient recovery and satisfaction. However, the company reported a net loss of $10.7 million in Q1 2025, an increase from a $6.6 million loss in the same period in 2024. Operating expenses rose significantly to $13 million in Q1 2025 from $8.7 million in Q1 2024, driven by increased R&D and SG&A costs [1].

In summary, while Profound Medical faces economic headwinds and financial challenges, the company's focus on clinical innovation and the potential of TULSA as a standard treatment for prostate disease remain promising. Investors should closely monitor the company's progress and the broader economic conditions that could impact its adoption rates.

References:
[1] https://www.gurufocus.com/news/2850551/profound-medical-prof-downgraded-by-raymond-james-amid-economic-concerns-prof-stock-news
[2] https://www.investing.com/news/analyst-ratings/raymond-james-lifts-tamarack-valley-stock-rating-to-outperform-93CH-4030846