Vericel Corporation (NASDAQ:VCEL) is one of the best small cap stocks to buy with huge upside potential. Truist analyst Richard Newitter slashed the price target on Vericel Corporation (NASDAQ:VCEL) to $45 from $50 on December 18, reaffirming a Buy rating on the stock as part of a broader research note previewing the coming year for the MedTech sector. Similarly, on December 16, Canaccord Genuity reaffirmed a Buy rating on Vericel Corporation (NASDAQ:VCEL) and set a $58 price target. Vericel Corporation ( ...

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Vericel (NasdaqGM:VCEL) FY Conference Summary Company Overview - **Company**: Vericel Corporation - **Industry**: Biotechnology, specifically in regenerative medicine and cell therapy Key Financial Highlights - **Q3 Revenue**: Achieved record revenue of approximately **$67.5 million** [4] - **MACI Revenue**: Contributed about **$56 million**, reflecting a **25% growth** [4] - **Burn Care Revenue**: Recorded its strongest quarter with approximately **$12 million** [4] - **Adjusted EBITDA**: Increased by **70%** to about **$17 million**, achieving a **25% margin** [5] - **GAAP Net Income**: Positive at approximately **$5 million** [5] - **Cash Generation**: Generated roughly **$20 million** in operating and free cash flow [5] Market and Product Insights - **Total Addressable Market (TAM)**: Identified a **60,000-patient TAM** for MACI [8] - **Market Segmentation**: - Key growth drivers include patella and larger defects, making up about **one-third** of the market [9] - Smaller defects, particularly in the femoral condyles (2-4 sq cm), represent about **two-thirds** of the market, with low penetration currently [10] - **Surgeon Adoption**: Growth in surgeon adoption is crucial, with expectations for continued growth in MACI usage among surgeons [12] Strategic Initiatives - **Salesforce Expansion**: - Expansion to approximately **100 territories** from **75**, with hiring ahead of schedule [26] - Focus on increasing surgeon activation and deeper penetration in existing accounts [29] - **International Expansion**: - Plans to target the U.K. for MACI rollout, with potential launch in **2027** [46] - New manufacturing facility in Burlington, MA, set to support both U.S. and international standards [46] Product Development and Pipeline - **MACI Ankle Study**: On track for initiation in Q4 [6] - **Arthro Training**: Surgeons trained in Arthro are showing higher biopsy growth rates compared to non-trained surgeons [18] - **Trochlear Defects**: Notable increase in utilization for trochlear defects, indicating a potential growth area [15] Financial Outlook - **2026 Growth Expectations**: Anticipated strong growth driven by MACI, with a cautious outlook for 2024 at around **20% growth** [34] - **Margin Guidance**: Projected **74% gross margin** and **26% adjusted EBITDA margin** for the current year, with expectations for margin expansion moving forward [49] Challenges and Considerations - **Burn Care Variability**: Epicel's revenue has shown variability, with efforts to stabilize and grow the burn care franchise [37] - **Nexabrid Utilization**: Despite achieving **70 P&T approvals**, utilization has been slower than expected due to workflow and training challenges [42] Conclusion - **Overall Positioning**: Vericel is well-positioned for continued growth with strong financial performance, strategic initiatives in place, and a focus on expanding its market presence both domestically and internationally. The company is optimistic about its future trajectory, particularly with the anticipated contributions from its expanded Salesforce and new product offerings.

Company Overview - Vericel Corporation is a leader in advanced therapies for the sports medicine and severe burn care markets, combining innovations in biology with medical technologies to create a differentiated portfolio of cell therapies and specialty biologics [2] - The company markets three main products in the United States: MACI, Epicel, and holds an exclusive license for NexoBrid [2] Product Details - MACI is an autologous cellularized scaffold product for repairing symptomatic, full-thickness cartilage defects of the knee in adults [2] - Epicel is a permanent skin replacement for treating patients with deep dermal or full-thickness burns covering 30% or more of total body surface area [2] - NexoBrid is a biological orphan product indicated for eschar removal in patients with deep partial-thickness and/or full-thickness thermal burns [2] Upcoming Events - Vericel Corporation will participate in a fireside chat at the Stephens Annual Investment Conference on November 20, 2025, at 11:00 a.m. ET [1]

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Core Insights - Vericel Corporation (VCEL) reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of a loss of $0.02 per share, marking a significant earnings surprise of +600.00% [1] - The company generated revenues of $67.5 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.00% and showing an increase from $57.9 million in the same quarter last year [2] - Vericel has outperformed consensus EPS estimates three times over the last four quarters, although it has only topped revenue estimates once in the same period [2] Future Outlook - The sustainability of Vericel's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $94.95 million, while for the current fiscal year, the estimate is $0.20 on revenues of $275.07 million [7] - The Zacks Rank for Vericel is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Medical - Biomedical and Genetics industry, to which Vericel belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported record total revenue of $67.5 million for Q3 2025, exceeding guidance, with MACI revenue growing 25% to $55.7 million [11][12] - GAAP net income was over $5 million, and adjusted EBITDA margin reached 25%, reflecting a nearly 800 basis points increase year-over-year [3][12] - Operating cash flow for the quarter was a record $22.1 million, contributing to a free cash flow of nearly $20 million [12] Business Line Data and Key Metrics Changes - MACI revenue growth was driven by strong biopsy growth, with record highs in both MACI biopsies and the number of surgeons taking biopsies [4][5] - Burn care revenue was $11.8 million, a 21% sequential increase, with EPICEL revenue at $10.4 million, marking its highest quarter of the year [11][12] - NexoBrid revenue reached $1.5 million, its highest since launch, growing 38% year-over-year [11] Market Data and Key Metrics Changes - The company has over 800 MACI Arthro-trained surgeons, with significant growth in biopsy and implant rates among trained surgeons compared to untrained ones [5][6] - The U.K. is targeted for MACI's international expansion, with plans to submit a marketing application in mid-2026 and a potential launch in the first half of 2027 [8][9] Company Strategy and Development Direction - The company is focused on expanding its MACI Salesforce and investing in sales operations, marketing, and medical functions to enhance operational excellence [10] - A phased approach to MACI's international expansion is being initiated, starting with the U.K. due to favorable market conditions [8][9] - The company plans to initiate a phase 3 MACI Ankle Clinical Study, representing a substantial growth opportunity [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong top-line growth and profitability, with expectations for continued revenue growth in 2026 and beyond [16][41] - The company anticipates a significant acceleration in MACI revenue growth from 18% in the first half of the year to approximately 23% in the second half [13][14] - Management highlighted the importance of maintaining a prudent approach to guidance, especially in light of potential variability in the burn care segment [45] Other Important Information - The company achieved a gross profit margin of 73.5%, with expectations for a gross margin of approximately 77% in Q4 [12][15] - The company is not assuming additional NexoBrid revenue related to the BARDA RFP process initiated in August, although there is potential for incremental revenue [14][15] Q&A Session Summary Question: Insights on MACI Arthro contributions in 2026 - Management indicated that they expect high contributions from MACI Arthro but will be prudent in guidance, starting with a baseline of around 20% growth for MACI [20][24] Question: MACI Arthro sales in Q3 and expectations for 2026 - Management clarified that they do not view MACI Arthro as cannibalizing legacy MACI but rather as expanding overall MACI utilization [47][49] Question: Trends in MACI biopsy growth and surgeon adoption - Management noted strong biopsy growth across all surgeon types, with a significant increase in trained surgeons leading to higher implant rates [70][71] Question: R&D spending and expectations for Q4 - Management confirmed total operating expenses of about $50 million for Q4, with increased investments in salesforce expansion and the ankle trial [75][78] Question: Post-surgical pain and recovery times with MACI Arthro - Management highlighted positive early indicators of reduced post-surgical pain and faster recovery times associated with MACI Arthro procedures [78][79]

Financial Performance - Total revenue for Q3 2025 reached $67,503,000, a 16.6% increase from $57,905,000 in Q3 2024[103] - Gross profit for Q3 2025 was $49,585,000, reflecting a 19.0% increase compared to $41,653,000 in Q3 2024[103] - Net income for Q3 2025 was $5,074,000, a significant improvement from a net loss of $901,000 in Q3 2024[103] - Total revenue for the three months ended September 30, 2025, was $67.5 million, a 16.6% increase from $57.9 million in 2024, driven primarily by MACI volume and price growth[104] - MACI revenue increased by 24.6% to $55.7 million for the three months ended September 30, 2025, compared to $44.7 million in 2024[104] - NexoBrid revenue grew by 37.7% to $1.5 million for the three months ended September 30, 2025, compared to $1.1 million in 2024[104] Expenses - Research and development expenses for Q3 2025 were $6,318,000, a 3.7% increase from $6,093,000 in Q3 2024[103] - Selling, general and administrative expenses for Q3 2025 totaled $39,817,000, up 4.7% from $38,025,000 in Q3 2024[103] - Research and development expenses for the three months ended September 30, 2025, were $6.3 million, a 3.7% increase from $6.1 million in 2024[107] - Selling, general and administrative expenses for the three months ended September 30, 2025, were $39.8 million, up from $38.0 million in 2024[108] Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended September 30, 2025, was $36.9 million, compared to $35.9 million in 2024[113] - Cash, cash equivalents, and restricted cash totaled $100.4 million as of September 30, 2025, compared to $70.4 million in 2024[114] - Net cash used in investing activities for the nine months ended September 30, 2025, was $(27.5) million, a decrease from $(64.4) million in 2024[113] - The company has a $150.0 million five-year senior secured revolving credit agreement, with no outstanding borrowings as of September 30, 2025[123] - The company expects its current cash and investments to support operations for at least 12 months from the issuance of the financial statements[121] Product Development and Market Expansion - MACI Arthro became commercially available in the U.S. during Q3 2024, expanding the target surgeon base from 5,000 to 7,000[97] - The FDA approved a supplemental Biologics License Application for MACI in August 2024, allowing arthroscopic delivery of the product[97] - NexoBrid's FDA approval in December 2022 and subsequent expansion to pediatric patients in August 2024 enhances the addressable market for burn care[100][101] - The company anticipates growth opportunities in revenue and market penetration for products like MACI, MACI Arthro, Epicel, and NexoBrid[128] - The potential FDA approval for MACI to treat ankle cartilage defects is a key factor in future growth[128] Operational Considerations - The company maintains an ample supply of NexoBrid at its U.S.-based logistics provider, mitigating potential supply chain disruptions[89] - The company is focused on scaling manufacturing operations to meet demand for cell therapy products, including a new facility in Burlington, Massachusetts[128] - The company expects fluctuations in sales and volumes, impacting operational results throughout the year[128] - The company is monitoring competitive developments and changes in third-party coverage and reimbursement[128] - The company acknowledges risks related to labor strikes and supply chain disruptions affecting product manufacturing[128] - Future regulatory changes and government policies could impact the business landscape and operational performance[128] Market and Economic Environment - The company expects minimal impact from U.S. trade policies and tariffs, as all operations are based in the U.S. and 100% of revenue is derived from domestic sales[90] - Geopolitical tensions, including conflicts in the Middle East and Ukraine, may negatively impact the global economy and capital markets[128] - The company has not observed significant changes in market risk exposures since December 31, 2024[130] - Forward-looking statements are subject to significant uncertainties, and actual results may differ materially from expectations[129]

VERICEL Q3 2025 RESULTS NOVEMBER 6, 2025 Safe Harbor Vericel cautions you that all statements other than statements of historical fact included in this presentation that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe that we have a reasonable basis for the forward-looking statements contained herein, they are based on current expectations about future events affecting us and are subject to r ...

Financial Performance - Total net revenue for Q3 2025 reached $67.5 million, a 16% increase from $57.9 million in Q3 2024[7] - MACI net revenue grew by 25% to $55.7 million, compared to $44.7 million in Q3 2024[5] - Burn Care net revenue was $11.8 million, consisting of $10.4 million from Epicel and $1.5 million from NexoBrid[5] - Net income for the quarter was $5.1 million, or $0.10 per diluted share, compared to a net loss of $0.9 million in Q3 2024[11] - Non-GAAP adjusted EBITDA increased by 69% to $17.0 million, representing 25% of net revenue[5] - Adjusted EBITDA for the three months ended September 30, 2025, was $16,996,000, representing a 69.5% increase from $10,040,000 in the same period of 2024[24] Cash Flow and Assets - Operating cash flow for the quarter was a record $22.1 million[5] - The company has $185 million in cash and investments, with no debt[12] - Cash and cash equivalents rose to $100,403,000 as of September 30, 2025, compared to $74,520,000 at the end of 2024, indicating a 34.7% increase[26] - Total current assets increased to $221,967,000 as of September 30, 2025, up from $212,777,000 at the end of 2024, reflecting a growth of 4.6%[26] Liabilities and Equity - Total liabilities decreased to $131,416,000 as of September 30, 2025, down from $140,755,000 at the end of 2024, a reduction of 6.5%[26] - Total shareholders' equity increased to $321,858,000 as of September 30, 2025, compared to $291,967,000 at the end of 2024, indicating a growth of 10.2%[26] Inventory and Expenses - Inventory levels increased to $18,155,000 as of September 30, 2025, compared to $17,373,000 at the end of 2024, reflecting a growth of 4.5%[26] - The company reported stock-based compensation expense of $8,699,000 for the three months ended September 30, 2025, slightly down from $9,224,000 in the same period of 2024[24] - The current portion of operating lease liabilities rose to $13,845,000 as of September 30, 2025, compared to $9,257,000 at the end of 2024, an increase of 49.5%[26] Future Outlook - Full-year revenue guidance is set at $272 to $276 million, with MACI revenue growth expected in the low 20% range[9] - The MACI Ankle™ program is on track to initiate clinical studies in Q4 2025[6]