Before the open this morning, several analyst initiations were published on recent IPO, SI-BONE (SIBN 18.54, +0.14, +0.76%), as its 25-day quiet period expired. The consensus among analysts was decisively bullish, highlighted by an Overweight rating from tier one firm Morgan Stanley.
In addition, BofA Merrill Lynch and Canaccord Genuity both assigned a "Buy" on the stock, with price targets of $23 and $25, respectively. The most bullish firm, though, was JMP Securities, which put a Market Outperform on the stock, with a $27 price target, about 50% higher than current prices.
After a red-hot start for its IPO, in which
its up-sized deal priced at the high end of expectations ($15 vs. $13-$15) and
opened for trading with a sizable 40% pop, the stock has cooled off
significantly with shares sinking to the $18-$19 area.
The decline coincides with the downturn in the broader markets, and is a function of profit-taking and de-risking portfolios, rather than anything company-specific. In fact, the company has yet to issue its first quarterly report as a public company, with 3Q18 results scheduled for November 29.
The first quarterly report for essentially any recent IPO is a landmark event, and can often be a catalyst for stock movement. So, too, is the quiet period expiration. So far, however, SIBN is seeing little reaction to the set of bullish initiations this morning. Of course, the weakness in the stock market overall this morning isn't helping the cause.
SIBN is not yet profitable and its revenue growth has been pretty modest. Revenue in 2016 was $42.1 mln, that grew 14% in 2017 to $48.0 mln. In 1H18, revenue grew 17% yr/yr to $26.4 mln. SIBN states that its growth rate has recently increased, which is attributed in part to more widespread insurance coverage, with many recent positive payor coverage policies exclusive to SI-BONE's iFuse system, as well as its efforts to educate the market regarding sacroiliac dysfunction. So perhaps growth will pick up more in 3Q18, but it's not clear yet.