That was a big takeaway from the company’s 2022 Analyst & Investor Day news release today.
“Our technology platform is well suited to meet the needs of an evolving healthcare landscape while transforming a market that has not been disrupted in the last 10 years,” said iRhythm CEO Quentin Blackford.
iRhythm today reaffirmed its 2022 guidance, predicting top-line growth of 29–30% to reach $415–420 million. Analysts polled on Yahoo! Finance predicted $418.64 million.
Investors appear to have been looking for more. IRTC shares were down more than 10% to $139.09 apiece in morning trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down more than 1%.
iRhythm is projecting a 20% compound annual growth rate over the next five years. Truist analysts said the predicted growth rate was relatively in-line with investor expectations.
“Top-line growth contemplates core U.S .growth as well as contribution from select international markets, but leaves upside optionality from new adjacent markets (asymptomatic, sleep apnea, HF) — both of which we think could be conservative,” said David Rescott, Richard Newitter, Samuel Brodovsky, and Lin Zhang at Truist.
They added in a later report that IRTC will likely be volatile until early November, when CMS is expected to issue a final national coverage determination on the Zio. “In all, we think [management’s] commitment to at least 20% top-line growth over the next 5 years was impressive, especially considering it leaves new market expansion opportunities as upside.”
iRhythm also expects to grow its adjusted EBITDA margin to roughly 15% by 2027. The growth would represent an 18.5 percentage points improvement from its mid-2022 annual guidance. Truist analysts thought there could also be an upside on the EBITDA projection.
More about iRhythm
With more than $322 million in revenue in its fiscal year ended Dec. 31, 2021, iRhythm came in 92nd in MassDevice and Medical Design & Outsourcing‘s 2022 Big 100 report on the largest medical device companies. Being a $1-billion-a-year company would have boosted into the 70s on the list.
Founded in 2008, the San Francisco–based company seeks to usurp the old-school Holter monitor for electrocardiograph monitoring and AFib detection. Competitors include Baxter’s BardyDx and AliveCor.
iRhythm’s Zio monitor is small, unobtrusive, and water-resistant — with a 14-day wear time on the left side of the chest. The wearable includes cloud-based data analytics and machine-learning capabilities for cardiac monitoring.
Future products and technology include the Zio Monitor, iRhythm’s new biosensor technology platform, and the clinically-integrated Zeus aystem for the Zio Watch that iRhythm has been working on with Google’s Verily. iRhythm officials think there is a great deal of potential in Zio providing early AFib detection. There are also efforts to leverage artificial intelligence and explore adjacent market opportunities.
“In the last 5 years, we have served more than 4 million patients and delivered compounded annual revenue growth of over 30%,” Blackford said. “Going forward, we see a clear growth path to $1 billion in revenue by 2027 supported by our core business in the U.S. and internationally.”