Truist Securities reduced its price target on iRhythm Technologies (NASDAQ:IRTC) to $200 from $215 while keeping a Buy rating on the stock. The analyst action reflects a revaluation of peer-group multiples rather than a change to iRhythm's near-term outlook, with Truist also raising its internal estimates for the company.
Operationally, iRhythm reported fourth-quarter revenue that aligned with its preannouncement and came in roughly 4% above consensus. The company attributed the revenue outperformance to robust demand for ZioAT and progress with innovative channel partners. iRhythm's revenue has expanded by 25% over the past twelve months, and the stock has returned 41% over the same period.
Notable milestones in the most recent reporting period included iRhythm's first reported positive GAAP net income. Despite that milestone, InvestingPro's analysis—referenced in the prior coverage—indicates that the stock appears overvalued relative to its Fair Value and that the company remains unprofitable over the last twelve months under that particular assessment. InvestingPro also assigns iRhythm an overall financial health score of "GOOD."
Management's guidance and longer-term targets point to a company mid-inflection. Executive projections outline an ambition to reach $1 billion in revenue and a roughly 15% EBITDA margin by 2027. The firm's MCT product is reported to be on track for a first-half 2027 launch window.
Truist flagged a recent investor concern tied to pending changes from CMS to risk-adjusted payment criteria. Rather than treating those regulatory adjustments as a headwind, the firm views the changes as a potential advantage for iRhythm, suggesting the company could be relatively well positioned under the new criteria.
The decision to cut the target to $200 stems from lower group multiples available in the market since Truist's previous valuation update. At the same time, Truist increased its internal estimates for iRhythm, indicating the firm expects improved underlying operating performance even as valuation benchmarks have compressed.
Additional company disclosures showed fourth-quarter revenue of $208.9 million, a 27.1% increase year-over-year, topping the earlier preannouncement of more than $201.8 million. For fiscal 2025, iRhythm reported both positive GAAP earnings per share and positive free cash flow for the first time.
Other broker commentary has been varied but generally constructive. Morgan Stanley maintained an Overweight rating with a $205 price target after preliminary fourth-quarter figures implied revenue of approximately $207 million versus consensus near $200 million. Canaccord Genuity trimmed its target to $198 from $212 but preserved a Buy rating.
Looking forward, iRhythm projects revenue growth in the 17% to 18% range for 2026, forecasting revenue near $870 million to $880 million. The company also expects an adjusted EBITDA margin around 11.5% to 12.5% for that year. Separately, iRhythm presented data indicating its Zio long-term ECG monitoring system delivers consistent performance across diverse populations, noting comparable results for Asian and non-Asian patients.
These combined developments - revenue outperformance, first-time GAAP profitability, cash flow improvements, and explicit multi-year margin and revenue targets - frame iRhythm's near-term operating narrative. The reduction in analyst price targets appears driven by broader valuation shifts rather than deterioration in company metrics, while differing broker targets reflect a mix of optimism on execution and sensitivity to market multiples.