Wells Fargo Starts K2M Group Holdings (KTWO) at Outperform

Wells Fargo initiated coverage on K2M Group Holdings (NASDAQ: KTWO) with an Outperform rating and a price target of $18-$20.

Analyst Larry Biegelsen said, "We have initiated coverage of K2M Group Holdings with an Outperform rating. KTWO is a global spine company that focuses on complex spine and minimally invasive surgeries. We believe KTWO can maintain midteens revenue growth, which is significantly faster than the overall spine market, over the next few years due to (1) a differentiated focus on higher growth complex spine and minimally invasive segments; (2) overall improvement of the global spine market; and (3) the ability of smaller spine players to take market share from larger players in the current market environment. Additionally, we believe KTWO’s geographic diversification (roughly 30% of sales outside the United States) lowers the overall risk of the business. Our valuation range of $18-20 is based on an enterprise value (EV)-to-sales multiple of 3.0x-3.3x on our 2015 estimated sales of $207 million."

For an analyst ratings summary and ratings history on K2M Group Holdings click here. For more ratings news on K2M Group Holdings click here.

Shares of K2M Group Holdings closed at $14.95 yesterday.

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