The Conformis Come-Back
Conformis Inc. (Nasdaq: CFMS) is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture & sell patient specific joint replacement implants. The implants are designed to fit each patient's unique anatomy.
CFMS stated in their previous ER (July 31, 2019), the company was updating their 2019 outlook to have "generally flat year-over-year product revenue growth for the full year 2019." The 'expected decrease in growth' was primarily due to denials in coverage from Aetna, the 3rd largest commercial payer. During the conference call, CFMS said they had "submitted its clinical and economic data to Aetna and understands that Aetna is currently reviewing its medical coverage policy." During the conference call, Conformis CEO suggested a potential update was coming this September from Aetna.
As we approach mid-month, price has held 50 retracement from the lower-high made on August 28, 2019 ($2.33 ). Conformis stated that the letter denying coverage from Aetna only referred to Conformis as a company, rather than a product denial per usual standards. If Aetna did make a mistake and is willing to cover the Conformis custom joint replacements, this could bring massive upside to the current stock price.I am forecasting a $5 PT (assuming CFMS gets Aetna coverage as they did with Cigna before).
Data from July 2019 10-K
Market Cap: $137.357 Million
Cash: $20.66 Million
Revenue (product and royalty): $19.593 Million
YoY Rev: +3%
52 Week High: $4.83
Ave Vol(10 Day): 628,900
Shares Outstanding: 68.68 Million
Shares Float: 50.01 Million
Technical's [UPDATED]
As shown in the previous chart, CFMS is positioned for a breakout. Price has continued to hold the 50% retracement from the Aug. 28, 2019 high. Previous patterns from January 2019 show similar price movement (trend-line in blue), indicating a "new" uptrend in the making.
-Bullish Gartley in tact;
-Aligning Fib time-cycles;
-RSI approaching breakout level;
-Our proprietary indicator showing strong momentum going into tomorrow's trading session (Flips green = Bullish AF), Weekly flashing bullish signal.
Conclusion
Potential of medicare approval for total knee replacement at surgery centers in 2020 is a huge opportunity as baby boomer population grows. The Aetna reimbursement issue will pass (as Cigna did). The soon to be released total hip system is being undervalued by the market. I am forecasting a $5 PT foregoing CFMS getting Aetna coverage.
To read more of my analysis on CFMS visit our site, here. Please like and follow so I can continue finding awesome charts! Thanks in advance team d+)
Disclosure: I am long CFMS. This is not a note to buy or sell. Please do your homework before investing.
CFMS stated in their previous ER (July 31, 2019), the company was updating their 2019 outlook to have "generally flat year-over-year product revenue growth for the full year 2019." The 'expected decrease in growth' was primarily due to denials in coverage from Aetna, the 3rd largest commercial payer. During the conference call, CFMS said they had "submitted its clinical and economic data to Aetna and understands that Aetna is currently reviewing its medical coverage policy." During the conference call, Conformis CEO suggested a potential update was coming this September from Aetna.
As we approach mid-month, price has held 50 retracement from the lower-high made on August 28, 2019 ($2.33 ). Conformis stated that the letter denying coverage from Aetna only referred to Conformis as a company, rather than a product denial per usual standards. If Aetna did make a mistake and is willing to cover the Conformis custom joint replacements, this could bring massive upside to the current stock price.I am forecasting a $5 PT (assuming CFMS gets Aetna coverage as they did with Cigna before).
Data from July 2019 10-K
Market Cap: $137.357 Million
Cash: $20.66 Million
Revenue (product and royalty): $19.593 Million
YoY Rev: +3%
52 Week High: $4.83
Ave Vol(10 Day): 628,900
Shares Outstanding: 68.68 Million
Shares Float: 50.01 Million
Technical's [UPDATED]
As shown in the previous chart, CFMS is positioned for a breakout. Price has continued to hold the 50% retracement from the Aug. 28, 2019 high. Previous patterns from January 2019 show similar price movement (trend-line in blue), indicating a "new" uptrend in the making.
-Bullish Gartley in tact;
-Aligning Fib time-cycles;
-RSI approaching breakout level;
-Our proprietary indicator showing strong momentum going into tomorrow's trading session (Flips green = Bullish AF), Weekly flashing bullish signal.
Conclusion
Potential of medicare approval for total knee replacement at surgery centers in 2020 is a huge opportunity as baby boomer population grows. The Aetna reimbursement issue will pass (as Cigna did). The soon to be released total hip system is being undervalued by the market. I am forecasting a $5 PT foregoing CFMS getting Aetna coverage.
To read more of my analysis on CFMS visit our site, here. Please like and follow so I can continue finding awesome charts! Thanks in advance team d+)
Disclosure: I am long CFMS. This is not a note to buy or sell. Please do your homework before investing.
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