Outset Medical initiated with a Buy at BTIG

BTIG initiated coverage of Outset Medical with a Buy rating and $6 price target. While Outset Medical has had recent stumbles and has relatively low margins and high cash burn compared to some of its MedTech peers, there are a few overhangs on the stock related to regulatory and commercial catalysts that BTIG believes can be cleared over the next several months to help lift shares, the analyst tells investors in a research note. Outset Medical has made steady progress on improving its gross margin, and cash burn is being cut further in 2024 and beyond, and potential positives for this year include a possible FDA clearance around mid-year for TabloCart with Prefiltration, improving sales as the longer capex cycle converts to purchases, a return to year over year sales growth, a stable base of recurring revenue, and nearly 900 bps of gross margin improvement.