Boston, MA 09/18/2014 (wallstreetpr) – Investment advisor Goldman Sachs Group Inc (NYSE:GS) thinks that the clinical solutions provider, Luemnis Ltd (NASDAQ:LMNS), offers the most compelling risk/reward in small and mid-cap or SMID medical technology space. The brokerage believes that the stock can provide a return of approximately 88% from the current level.
Cheaper Than Peers
The brokerage believes that the current share price of Luemnis offers cheap entry and is available at a 50% discount to the rivals on enterprise value and sales. Analyst David Roman said that the ongoing corporate turnaround was well intact and that he believes it has been materially de-risked. He said that everything was in favor of the company such as solid execution, leverage to improving high-end consumer spending, low volatility of top line from business and geographic mix, and product launches that were running well ahead of the schedule.
The investment advisor believes that Luemnis has been overlooked by some investors in the wake of a tough IPO and SMID-cap background earlier in the current year, low average daily volume, and a bit of complicated business model. That said, the brokerage thinks that general apathy has created a compelling set-up for Luemnis, especially with the improving liquidity trend and the IPO lockup.
Reiterates Buy Rating
Goldman Sachs Group Inc (NYSE:GS) said that its buy-side conversations indicated attention in the turnaround story with higher visibility and liquidity needed as a method for sentiment to turn positive towards the stock. After the IPO lockup, the investment advisor sees considerable opportunity for upside potential since one of the big overhangs was removed. This apart, the continued strong results should fuel the Wall Street expectations higher.
After considering all the factors, analyst Roman said that Luemnis provides most compelling risk/reward in SMID-Cap of MedTech space since it trades lower than its peers. The brokerage has a one-year price objective of $17, which suggests that there is a potential reward of about 88%. Analyst also reiterated its Buy rating on the shares of Luemnis.
