Cantor Fitzgerald initiates Inova Technology stock with Overweight rating

Investing.com - Cantor Fitzgerald initiated coverage on Inova Technology, Inc. (NASDAQ:INVA) with an Overweight rating and a price target of $26.00 on Friday. According to InvestingPro data, the company maintains impressive gross profit margins of 88.8% and demonstrates strong financial health with a current ratio of 2.48.

The research firm highlighted Inova's diversified biopharma business, which includes royalties on COPD therapies Breo and Anoro that generated $61 million in the first quarter of 2025. These royalties are expected to continue through 2031/2033 with a net present value of approximately $1 billion. The company's strong cash flow generation is evident in its 17% free cash flow yield, as reported by InvestingPro .

Cantor Fitzgerald values the royalty business at $12.80 per share, noting it provides a "valuation backstop" of about $1 billion compared to Inova's current market capitalization of approximately $1.2 billion.

The firm also pointed to Inova's critical care business, which recorded revenue of approximately $30 million in the first quarter of 2025 and is projected to grow at a 23% compound annual growth rate over the next five years. This segment is valued at $6.80 per share. The company has already demonstrated strong growth momentum, with overall revenue increasing 18.7% in the last twelve months.

Inova's strategic investments contribute an additional estimated value of $6.10 per share, according to the research firm, which expects the company to be profitable going forward despite reporting a loss in the first quarter of 2025 due to changes in fair value of investments. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available through their advanced valuation models. Get more detailed analysis and 8 additional ProTips by subscribing to InvestingPro .

In other recent news, Innoviva Specialty Therapeutics and the Global Antibiotic Research & Development Partnership (GARDP) have announced that the U.S. Food and Drug Administration (FDA) has accepted a New Drug Application for zoliflodacin, an investigational oral antibiotic for treating uncomplicated gonorrhea. The FDA has granted Priority Review for this drug, setting a target action date of December 15, 2025, for its decision. If approved, zoliflodacin would be the first new antibiotic specifically for gonorrhea in decades, offering a single oral dose as a potentially more convenient alternative to current injectable treatments. The drug demonstrated non-inferiority to the standard treatment in a Phase 3 clinical trial and was generally well-tolerated, with no serious adverse events reported. This development is crucial as gonorrhea has developed resistance to most antibiotic classes, including ceftriaxone, which has been in use since 1984. Innoviva holds commercial rights for zoliflodacin in major markets, while GARDP retains rights in most low and middle-income countries. The FDA's decision is informed by data from multiple clinical trials, highlighting zoliflodacin's effectiveness in achieving a microbiological cure at the urogenital site. The World Health Organization identifies antimicrobial resistance as one of the ten most critical global public health threats.

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