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Inotiv (NOTV) Shows Strong Bookings and Fortified Sales Force, Analyst Upgrades Rating

By Don Francis, Editor
February 10, 2024 8:05 AM UTC
Inotiv (NOTV) Shows Strong Bookings and Fortified Sales Force, Analyst Upgrades Rating

Jefferies's David Windley upgraded their rating on Inotiv (NASDAQ: NOTV) from Hold to Strong Buy on February 9, 2024. The analyst also raised their price target by 283.3% from $3 to $11.5.

Inotiv, a company that provides drug discovery and development services to the pharmaceutical, chemical, and medical device industries, recently released its Q1 2024 report. The report showcased "surprisingly strong" bookings, according to the analyst who reviewed the data. The company's fortified sales force, backed by a lowered cost structure and more integrated services, is selling more aggressively while maintaining margins.

Looking ahead, the analyst predicts that if Inotiv can boost sales even modestly, its cost initiatives will drive EBITDA higher throughout FY 2024 and FY 2025.

Inotiv's Q1 2024 report revealed a loss per share of $0.60, which missed the Zacks Consensus Estimate of $0.07 but beat Q1 2023's figure by 82%. Revenues for the quarter were $135.5 million, slightly below the Zacks Consensus Estimate of $136.18 million but up 10.4% compared to Q1 2023. The company reported adjusted EBITDA of $9.6 million.

Despite missing some estimates, Inotiv's management reiterated its guidance for FY 2024, expecting revenue in the range of $580 million to $590 million and adjusted EBITDA between $75 million and $80 million. President & CEO Robert Leasure Jr. expressed confidence in the company's strategic initiatives, which have improved efficiencies and are expected to positively impact top and bottom lines.

It is worth noting that 100% of top-rated analysts currently rate NOTV as a Strong Buy or Buy, with no analysts recommending a Hold or selling the stock.

Since the release of Inotiv's Q1 2024 report on February 7, 2024, the stock price has surged by 34.8%. However, when compared to the previous year, the stock is down by 30.6%. During the same period, NOTV has underperformed the S&P 500, which has experienced a decline of 23.2%.

The analyst responsible for the rating upgrade, David Windley, is ranked in the top 12% of Wall Street analysts by WallStreetZen. With an average return of 15.5% and a win rate of 58.5%, Windley specializes in the Healthcare sector.

Inotiv, Inc., formerly known as Bioanalytical Systems, Inc., operates in the United States, rest of North America, the Pacific Rim, Europe, and internationally. The company offers a range of services, including screening and pharmacological testing, nonclinical safety testing, formulation development, regulatory compliance, and quality control testing. Additionally, Inotiv sells analytical instruments to the pharmaceutical development and contract research industries.

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