RCEL Stock Forecast & Price Target

AVITA Medical's positive outlook is bolstered by a projected high single-digit growth in burn and trauma centers, accompanied by a 3.2% increase in surgeon productivity, indicating strong demand for its RECELL system. The company has also demonstrated significant improvements in cash management, reducing cash usage to approximately $6.2 million in Q3, down from $10.1 million in Q2, while amending its credit agreement to support its financial flexibility. With anticipated reimbursement stabilization and regulatory progress in various European markets, AVITA is strategically positioned for growth without requiring substantial additional expenditures in the near term.

Avita Medical has reduced its full-year 2025 revenue guidance from $76 million to $70 million-$74 million, reflecting a decline in productivity per surgeon and lower expected demand, leading to a projected year-over-year revenue decline of 9% to 15%. As the company navigates ongoing reimbursement challenges and execution issues, it faces significant downside risks, including the potential for further reductions in guidance and a constrained capital position. Additionally, the downward revision in revenue expectations suggests decreased demand for the RECELL system, especially in its top hospitals, which has resulted in a substantial revenue decrease in the first half of fiscal 2025.