Analyst Michael Matson of Needham reiterated a Buy rating on Enovis (ENOV – Research Report), with a price target of $64.00.
Michael Matson has given his Buy rating due to a combination of factors that highlight Enovis’s strong financial performance and future potential. Enovis exceeded expectations in its fourth-quarter 2024 results, with revenue, EBITDA, and EPS all surpassing consensus estimates. The company showed significant improvement in pro forma revenue growth, increasing from 6% in the third quarter to 7% in the fourth quarter, as the negative impact from the Lima dissynergies lessened. Additionally, Enovis’s corporate revenue growth was bolstered by a 10% increase in Reconstructive and a 3% rise in Prevention & Recovery.
Enovis’s financial health is further underscored by an increase in its adjusted gross margin by 150 basis points year-over-year and a 210 basis point rise in its adjusted EBITDA margin, driven by a favorable mix, cost improvements, and benefits from the Lima deal. The expectation of synergies beginning in 2025 adds to the positive outlook. Despite the upcoming retirement of CEO Matt Trerotola, the strong fourth-quarter results reinforce the view that Enovis is a compelling growth at a reasonable price (GARP) story, justifying the Buy rating.