Axogen: Renewed Covid-19 Worries Hitting, But The Growth Story Is Very Appealing

 

I’ve said in the past that it’s often a fool’s errand to try to figure out short-term moves in stocks that don’t have clear-cut causes, but I’ll throw caution to the wind and risk being foolish – I think Axogen’s (AXGN) (formerly "AxoGen") recent pullback from around $22 (and closer to $21 when I last wrote about the stock) has a lot to do with fears that resurgent COVID-19 infections will yet again drive lower procedure counts and deferrals in the company’s addressable markets of trauma, breast reconstruction, and oral-maxillofacial surgery (or OMF).

I don’t dismiss that short-term risk, but I do believe it is just a short-term issue. Axogen’s numbers continue to show increasing use among its core surgeons, and whenever pandemic-driven restrictions lift, there will be meaningful sales and education opportunities. Further down the road, clinical data should further drive the case for using Axogen’s nerve repair products. With 20% annualized revenue growth over the next five years and close to 20% growth on a longer-term basis, I believe Axogen shares are worth another look on this pullback.

 

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Axogen: Renewed Covid-19 Worries Hitting, But The Growth Story Is Very Appealing