BTIG analysts have reiterated a Buy rating and $132.00 price target on iRhythm Technologies (IRTC).
The analysts commented: “As iRhythm has begun hinting at its initial research into the sleep apnea diagnostics market, we want to understand the current diagnostic landscape today and where IRTC may ultimately end up. To be clear, IRTC has just put its foot down – nothing more for now. — in this area, and the exact direction of further action is not yet clear. IRTC is in the early stages of evaluating the sleep apnea diagnostic process. Based on conversations with IRTC and public calls, the pilot program is ongoing from 5-10. to current IRTC clients (cardiologists and primary care physicians) to help IRTC learn whether these physicians will prescribe HST, which patients they may prescribe HST, what prescribing behavior may be, how the process for diagnosing obstructive sleep apnea (OSA) may be improved, and what happens after a patient is diagnosed, including who will manage that patient’s sleep care. This pilot does not integrate any IRTC and partner offerings with a third party Independent Diagnostic Testing Facility (IDTF). As detailed in the following pages, we see a fragmented home sleep testing market and opportunities for disruption. During its first-quarter earnings call, IRTC highlighted its proven capabilities in arrhythmia detection and pointed to similarities to the home sleep testing market. There is also a large overlap between IRTC’s existing patient population and those with OSA, with the company citing statistics that up to 80% of patients with AF have OSA. For now, the pilot project is the first step in assessing the further development of IRTC. We see a wide range of opportunities that could be considered, including partnering with or offering the full range of IRTC products and IDTF assessments. Reimbursement, detailed on page 5, is another open issue because any testing proposal must meet certain requirements to qualify for coverage. We view the sleep diagnostics market as a potentially interesting area, but since it is in the early stages of valuation, we do not expect significant revenue for at least a couple of years. Read on to learn more about the current state of sleep apnea detection. We are not changing our IRTC forecast. We repeat “Buy”.