Heartflow shares surge 46% on strong Q2 revenue and raised guidance

Heartflow Inc. shares climbed 46 per cent week-on-week, ranking as the fourth-highest gainer on the stock market following the release of its second-quarter financial results. The surge was driven by a 48 per cent increase in revenues to $64.08 million, up from $43.2 million in the same period last year, supported by growth in US Fractional Flow Reserve and Plaque revenue case volumes.

The New York-based company, which utilises an artificial intelligence platform for identifying and treating coronary artery disease, also raised its full-year revenue growth outlook. Management now projects revenues between $246 million and $250 million, representing 40 to 42 per cent growth, an upward revision from previous expectations of $228 million to $232 million.

Despite the top-line growth, the company reported a 70.6 per cent widening in its net loss to $15.7 million, compared to $9.2 million in the prior year period. For the first half of the year, revenues increased by 45 per cent to $116.67 million, while the net loss inched up by 3.6 per cent to $43.1 million.

President and CEO John Farquhar highlighted the company's expanding market position, noting that the coronary computed tomography angiography market remains significantly under-penetrated. He described the Plaque business as a rapidly emerging second growth engine that is helping to win new accounts and deepen physician utilisation.

Several investment firms responded positively to the results, raising their price targets and maintaining positive ratings. Stifel lifted its target to $45 from $40, JPMorgan increased its target to $45 from $35, and Wells Fargo raised its target to $39 from $37, all while maintaining buy or overweight recommendations.

Institutional interest in the stock has also intensified, with data showing the number of hedge funds holding positions rising from 16 to 25. Combined holdings by these funds increased by 55 per cent to $232.9 million, up from $150 million in the previous quarter, signalling growing professional investor confidence in the company's long-term prospects.