Orthofix International (OFIX) Stock Forecast & Price Target

Orthofix Medical Inc. is forecasted to achieve sustainable top-line growth in the mid-to-upper single digits, predominantly driven by its robust global spine and orthopedic segments. The company's adjusted EBITDA margin is projected to expand significantly from 8.4% in 2024 to 13.5% by 2027, underpinning the anticipated increase in operational efficiency and profitability. Additionally, the orthopedic segment's impressive growth trajectory of over 16% in 2024 suggests continued strong performance, bolstered by effective distribution expansion and cross-selling strategies.

Orthofix Medical Inc. is projected to face significant challenges in managing its net interest expense, which is expected to remain between $19 million and $20 million for FY/25, limiting improvements in free cash flow until FY/26 and FY/27. The company's segment adjusted EBITDA margins in its orthopedics business were notably low at just 3.7% in FY/24, driven by high selling, general, and administrative expenses that were significantly above expectations. Additionally, despite a seemingly favorable market environment for spine and orthopedic products, the overall modest valuation and perceived lag in innovation further contribute to a negative outlook on the stock.