Avita Medical Earnings: Shares Remain Undervalued With Long-Term Opportunity Intact

We keep our AUD 5.40 fair value for no-moat Avita Medical. Second-quarter 2024 commercial revenue of USD 15.1 million rebounded sharply, up 37% on the first quarter, driven by new hospital accounts for the use of RECELL for full-thickness skin defects. The firm opened 37 new accounts in the second quarter, up from 22 accounts in the first. The pipeline of new accounts remains strong with 52 in the evaluation phase and a further 37 in the decision phase. This outlook along with a strong start to the quarter underscores management’s third-quarter 2024 commercial revenue guidance of USD 19 million-USD 20 million. The midpoint implies strong sequential growth of 29% on the second quarter.