Six weeks ago they couldn’t do anything right in the eyes of Wall Street but NxStage Medical, Inc. (NASDAQ:NXTM) seems to have found its legs again.
The Lawrence, Mass.-based dialysis maker got some more positive news from The Street this week when JP Morgan Chase & Co. reiterated its ratings upgrade of NXTM from early June. The investment bank maintained its “overweight” rating and target price of $26 per share.
Shares of NXTM have had a roller coaster ride in 2011. The stock hit a high water mark of $26.80 in mid-January before falling off 28 percent over the next two months. A brief rebound through April stalled out and sent the stock plummeting once again, before analysts decided in early June that NXTM was once again worth the price.
Since the June 10 ratings upgrade by JP Morgan, shares of NXTM have climbed 16 percent, based on yesterday’s closing price of $20.79.
In June, the investment bank said it was upgrading NXTM shares from neutral to overweight, based on its internal surveys that suggest a 30 percent growth in the home hemodialysis market and the “potential for clarification of the Medicare home reimbursement process in the next 24 months (and possibly as early as this summer), improving access.”
In addition, the investment bank said that investor “concerns that a key customer [Fresenius Medical Care Holdings Inc. (NYSE:FMS)] is restricting the number of patients it will support on home hemodialysis” were overdone on Wall Street.
On June 8, Leerink Swann’s Danielle Antalffy said that the company was poised to take a $1 billion bite out of the dialysis market as it drives its share from 1 percent of dialysis patients into double-digit range.
NxStage reported losses of $6.0 million on sales of $50.6 million during the three months ended March 31. That compares with net earnings of $9.0 million, or 19 cents per diluted share, on sales of $40.4 million during the same period last year.
