Canaccord Genuity has lowered its 12-month price objective for iRhythm Technologies (IRTC) to $198 from $212, though the brokerage left its Buy rating intact. The stock is trading at $158.88, reflecting roughly a 10% decline year-to-date but remaining about 41% higher than a year earlier.
iRhythm released fourth-quarter results that showed revenue of $208.9 million, an increase of 27.1% compared with the year-ago quarter. That top-line figure outpaced the company’s early January preannouncement, which indicated revenue of more than $201.8 million.
On profitability metrics, the company reported adjusted EBITDA of $34.3 million for the quarter. Management said iRhythm achieved positive GAAP earnings per share in the fourth quarter and generated positive free cash flow for fiscal 2025 - the first time the company has reported positive free cash flow for a fiscal year.
Separately, preliminary fourth-quarter revenue had been reported at approximately $207 million, which topped consensus estimates of $200 million and was accompanied by record unit volume for the period. In reaction to these results, Morgan Stanley kept an Overweight rating on iRhythm with a price target of $205.00.
Company leadership reiterated guidance for 2026 that was provided in January, forecasting revenue between $870 million and $880 million and an adjusted EBITDA margin in the range of 11.5% to 12.5%. That 2026 revenue range implies year-over-year growth of roughly 17% to 18% compared with the company’s 2025 expectations.
Canaccord’s decision to trim its price target reflects valuation compression across the firm’s peer comparison group, the analyst team said. The brokerage also noted that recent regulatory changes affecting Medicare Advantage - including flat payment updates and modifications to risk adjustment and audit rules - have put downward pressure on the share price in recent weeks.
However, Canaccord highlighted a potential offset to those headwinds. The firm suggested that Medicare Advantage changes could act as a tailwind for iRhythm’s expanding Innovative Channel Partners business, since the company’s Zio monitoring platform can supply Medicare Advantage plans with auditable clinical documentation that supports compliant risk adjustment.
Additional financial context comes from InvestingPro data, which shows iRhythm with a gross profit margin of 70% and a financial health assessment labeled as "GOOD." The same data set also reports that analysts are not forecasting full-year profitability for the company in 2026.
Management has said the strength in the fourth quarter supports the company’s expectation to exceed previously stated revenue guidance for 2025. Alongside commercial and financial updates, iRhythm presented clinical data indicating its Zio long-term ECG monitoring system performs consistently across diverse patient populations, including Asian patients. The study reported comparable median wear time and analyzable ECG duration when comparing Asian and non-Asian patients, pointing to the system’s broad applicability.
In summary, iRhythm posted solid quarterly operating results and reached several profitability and cash flow milestones for fiscal 2025, while analysts and brokerages weigh valuation compression and regulatory developments as they set price targets and ratings.
Key points
- Canaccord Genuity cut its iRhythm price target to $198 from $212 but kept a Buy rating - impacting equity valuations in the medical device and diagnostics sector.
- iRhythm delivered Q4 revenue of $208.9 million, up 27.1% year-over-year, and reported positive GAAP EPS for the quarter and positive free cash flow for fiscal 2025 - relevant to investors focused on cash-flow and profitability trends.
- Medicare Advantage payment and audit rule changes have pressured the stock recently, though the Zio platform may provide auditable documentation that benefits Medicare Advantage plans - a development affecting healthcare payers and vendors.
- Regulatory changes to Medicare Advantage - including flat payment updates and modifications to risk adjustment and audit rules - have weighed on iRhythm’s share price and create ongoing uncertainty for reimbursement and payer behavior.
- Analysts do not expect the company to achieve full-year profitability in 2026, introducing earnings and margin uncertainty for investors assessing longer-term financial performance.
- Valuation pressures across the comparison group have led to multiple compression, which Canaccord cited as the reason for its reduced price target; sector-wide valuation shifts could further affect stock performance.