Procept Biorobotics: "The Big Distraction"
Procept has lost around 30% of its market value on no official news in the last week. Here I take a look at the main suspect in this episode.
Friends of NFTBC
About a week ago a sell-side analyst downgraded PRCT on concerns around competition from PAE:
The stock has gone down in a straight line ever since:
So the plan here is to briefly revisit the PRCT thesis and talk a little about how PAE might impact it, if at all.
First of all, I’m working on the assumption here that the Leerink downgrade is in fact, the catalyst for whatever is going on with PRCT currently. It does coincide perfectly with the start of the slide and the threat of PAE is something that analysts often like to raise on PRCT’s conference calls - so it’s been something of a latent fear residing in the background. Otherwise, I would just assume that some investors are taking the opportunity to position for a negative guidance revision. It’s fair to say there’s a degree of scepticism about PRCT’s guidance for the rest of the year, which entails an acceleration in H2. At NFTBC I don’t work with alt data or such things, so I have no special insight into that. My strategy is more to give Larry the time and space to carry out his strategy, all the while trying to make a sensible ongoing assessment of whether it’s going to work - in all likelihood this is going to be more of a multi-year process rather than making strong conclusions from one quarter to the next. Having said all this, PRCT management were supposed to appear for a fireside chat at a Truist medtech conference this week and I was looking forward to hearing what they had to say. But this event seems to have been cancelled. Some may interpret this as incrementally suspicious but equally these things do get cancelled from time to time for innocent reasons. At the time of writing, there has been no 8-K or suggestion of a material development.
[NFTBC does not give advice - please do your own research. I currently own shares in PRCT].
