iRhythm Tech's Stock Selloff Went Too Far After Preliminary Update: Analyst

Core Insights - iRhythm Technologies Inc. anticipates full-year 2025 revenue to exceed $740 million, driven by record revenue unit volume in Q4 2025, surpassing analysts' consensus of $737.95 million [1] - For fiscal year 2026, iRhythm expects revenue between $870 million and $880 million, reflecting a year-over-year growth of approximately 17% to 18%, compared to the consensus of $862.68 million [2] - The company projects an adjusted EBITDA margin of approximately 11.5% to 12.5% for 2026 [2] Growth Catalysts - iRhythm is positioned to accelerate growth through multiple catalysts, including deeper penetration in primary care and population health via AI-powered risk stratification partnerships, momentum in mobile cardiac telemetry, expansion into adjacent markets like obstructive sleep apnea, and continued international execution [3] Market Reaction - Following the update, iRhythm's stock fell around 20%, attributed to the delay of the Zio MCT launch to 2027 and formal 2026 guidance that did not meet market expectations [4] - Analyst Brandon Vazquez believes the stock weakness is overblown and recommends buying shares, adding iRhythm to the William Blair Analyst Conviction List due to favorable growth prospects and valuation reset [5] Management Insights - Management had previously hinted at a delay for Zio MCT, and the recent conference made this explicit, leading to adjustments in buy-side models regarding MCT contributions in 2026 [6] - William Blair does not foresee any FDA issues that iRhythm cannot address in a reasonable timeframe, and the expected 2027 launch allows for flexibility in case of additional agency requests [6] Stock Performance - iRhythm shares were trading at $155.44, up 1.23% at the time of publication, indicating some recovery amidst the recent stock volatility [7]