iRhythm Technologies (IRTC) Stock Forecast & Price Target

iRhythm Technologies Inc. reported a revenue of $164.3 million for the fourth quarter of 2024, reflecting a notable increase of 24.0% year-over-year, largely driven by strong Zio XT volumes and the positive impact of a new channel partner. The company is also expanding its international presence, with early launches in select European countries and plans for a launch in Japan anticipated in mid-2025, which suggests potential for substantial future revenue growth. Additionally, iRhythm achieved a gross margin of 70.0%, up 400 basis points from the previous year, indicating improved operational efficiency and a pathway toward near-term profitability.

iRhythm Technologies Inc. is facing a challenging financial outlook as management anticipates first-quarter 2025 revenue to be approximately 22.5% of the full year's guidance, which could imply a significant total of $153 million at the midpoint. The forecast, which assumes low single-digit pricing headwinds, raises concerns about the potential for flat to declining gross margins, particularly in the context of a bear case scenario predicting declining average selling prices for its Zio XT product. Additionally, various risks such as poor sales execution, heightened competition, negative reimbursement developments, and the threat of an additional equity offering further contribute to the negative sentiment surrounding the company's financial stability.