Zacks healthcare industry analyst Tom Park has recently advised a Hold to the shares of medical equipment manufacturer Spectranetics Corporation (SPNC). Here are some of the reasons why:

'SPNC announced that it initiated the PATENT trial to assess patency and safety using the TURBO-Booster and TURBO elite products in treating in-stent restenosis. Management previously increased its pre-tax income guidance. We previously increased our FY07 EPS estimate. As a result of positive trends and successful initiatives, SPNC has been successful at driving revenue growth in the high double digits.

'Sales growth over the long term appears promising as a result of the emphasis in R&D investment. However, the company has a history of being unable to maintain profitability. Our price target is based on a price-to-revenue multiple of 4.9x our 2008 revenue estimate. At its current price of $13.23 per share, SPNC is trading at 4.3x our next fiscal year revenue estimate of $103 million, which is at a premium to the group average multiple of roughly 3.5x.

'At this stage, we believe most of the growth has been factored in the stock price.  We believe the stock is fairly valued at 4.9x our 2008 revenue estimate. Our target price is therefore $15.00.'