TELA Bio Inc. (TELA) delivered mixed third-quarter results that had analysts reaching for their red pens to mark down price targets.
The medical device company posted a loss of 19 cents per share, which actually beat analyst expectations of a 20-cent loss. So far, so good. But revenue came in at $20.7 million, missing the consensus estimate of $21.8 million. That's the kind of mixed bag that makes Wall Street analysts nervous.
CEO and Co-Founder Antony Koblish tried to keep things positive, saying the company "demonstrated continued growth and meaningful progress this quarter, resulting from a strengthened leadership team and strategic changes to enhance our commercial organization."
In what's often a sign that a company needs cash, TELA Bio also announced a $13 million underwritten registered direct offering of common stock and pre-funded warrants. Investors weren't thrilled—shares plunged 13.7% to trade at $0.96 on Friday.
The analyst reactions were swift. Citizens JMP analyst David Turkaly kept his Market Outperform rating but slashed his price target from $7 down to $5. That's a meaningful reduction that suggests the path forward looks rockier than previously thought.
Piper Sandler analyst Matt O'Brien maintained a Neutral stance but lowered his price target from $2 to $1.25. Even that more conservative estimate got cut by nearly 40%, reflecting concerns about the company's near-term prospects.
With shares now trading under a dollar and analysts trimming their outlooks, TELA Bio faces an uphill battle to convince the market that its strategic changes will translate into the growth investors want to see.
