Organogenesis stock rating reiterated by Cantor Fitzgerald amid reimbursement changes
Investing.com
Published Jul 15, 2025 07:51AM ET
Investing.com - Cantor Fitzgerald has reiterated an Overweight rating and $7.00 price target on Organogenesis Holdings (NASDAQ:ORGO) following the release of the CY 2026 Medicare Physician Fee Schedule Proposed Rule. The stock, currently trading at $4.49, has shown impressive momentum with a 40% gain year-to-date and over 55% return in the past year.
The proposed rule outlines significant changes to how skin substitute products will be reimbursed under Medicare, representing what Cantor Fitzgerald describes as a "fundamental shift" in the reimbursement structure.
Cantor Fitzgerald analyst Ross Osborn maintained the positive outlook on Organogenesis despite the pending regulatory changes that could impact the company's business model.
Organogenesis Holdings specializes in advanced wound care and surgical solutions, with skin substitutes forming a core part of its product portfolio.
The Centers for Medicare & Medicaid Services (CMS) proposal for Calendar Year 2026 will change how healthcare providers are compensated for using skin substitute products, potentially affecting companies throughout the regenerative medicine sector.
In other recent news, Organogenesis Holdings reported a significant decline in its Q1 2025 revenue, which decreased by 21% year-over-year to $86.7 million. The company also experienced an operating loss of $26.7 million, a substantial increase from the $3.9 million loss in the same quarter last year. Despite these results, Organogenesis reaffirmed its full-year revenue guidance of $480-$535 million, indicating confidence in its long-term market opportunities. The U.S. government proposed changes to Medicare reimbursement for skin substitutes, which could impact Organogenesis and other wound-care product manufacturers. This proposal involves treating skin substitutes as "incident-to supplies," potentially reducing spending on these products by nearly 90%. Analyst Ryan Zimmerman from BTIG maintains a buy rating on Organogenesis, despite acknowledging the proposal's potentially harsh market impact. Additionally, Organogenesis continues to face market uncertainty due to regulatory delays, particularly regarding the delayed implementation of the Local Coverage Determination (LCD) until January 2026. The company remains optimistic about future opportunities arising from these regulatory changes and is preparing to submit additional clinical evidence to support its products.
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