Outset also remains unprofitable, increasing the risk that it could have to raise capital in the future through dilution-causing stock offerings.
The company could take longer than expected to build up its home dialysis market share. To be sure, Outset Medical stock comes with more risk than some investors can tolerate. But that is changing as well with new Medicare incentives in place. Reimbursement guidelines have also been a historical barrier limiting the adoption of home dialysis. It eliminates the need for multiple dialysate bags for each treatment, cuts out the associated prep time, requires fewer treatments each week, and is much easier to learn than older machines. Outset's Tablo, though, is a game-changer. Relatively few patients have opted for home dialysis in the past, in part because of the technological drawbacks of previous devices. home dialysis market, estimated to be $8.9 billion and growing. However, that pales in comparison to the U.S. 33 on Deloitte Technology's Fast 500 list of North America's fastest-growing companies, thanks to its revenue growth of around 5,000% between 20.Īcute care remains a key growth area for Outset, with a $2.5 billion addressable market.
The company has been highly successful, by the way. Most of Outset's success so far has come from sales of its Tablo system in the acute care market. Outset projects its revenue will increase between 22% and 30%, but many investors were hoping for even stronger growth. The sell-off in recent months appears to be due primarily to Outset's guidance for full-year 2023. Although that hold lasted for less than two months, it caused Outset's shares to plunge. Food and Drug Administration reviewed a regulatory application for changes to the device. For example, in June 2022, the company had to hold shipments of its Tablo hemodialysis system for home use while the U.S.
Some of this decline can be chalked up to a dismal overall environment that began last year for growth stocks. The healthcare stock is down around 30% in 2023 alone. Since its initial public offering in September 2020, Outset's shares have plunged close to 70%. Why would selecting Outset perhaps be a surprise? The stock hasn't actually delivered growth thus far. To some, Outset might be a surprising choice for best growth stock under $20. Shares of the hemodialysis-system maker currently trade at a little below $18. The stock I have in mind is Outset Medical (NASDAQ: OM).
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