Wells Fargo has opened coverage on HeartFlow with an Overweight recommendation, arguing that a move toward CT-based coronary artery testing will drive company growth at a faster pace than the market currently anticipates.
The research note highlights a broad transition to coronary CT angiography, or CCTA, which the bank describes as still early in its adoption curve, representing roughly 11% of all non-invasive coronary artery disease tests today. HeartFlow’s analytic software is designed to work with CCTA scans to assess blood flow and plaque accumulation, enabling clinicians to inform treatment decisions without resorting to invasive procedures.
Growth and product penetration forecasts
Wells Fargo projects US CCTA volumes will expand at an 11% compound annual growth rate over the next two years, a figure the bank characterizes as conservative based on responses from a recent physician survey. That expected increase in CCTA utilization forms the core of the bank’s rationale for higher demand for HeartFlow’s main offerings: Fractional Flow Reserve from CT (FFRCT) and plaque analysis.
The bank’s model anticipates HeartFlow delivering revenue growth in excess of 20% per year through the next three-year period, driven primarily by deeper penetration of these two products both in the United States and internationally. Specifically, Wells Fargo estimates FFRCT penetration of addressable CCTAs at 55% in 2025, rising to about 71% by 2027. For plaque analysis, the bank forecasts a sharper climb, from roughly 2.5% penetration to nearly 25% over the same timeframe.
Market position and competitive dynamics
According to the survey cited by Wells Fargo, HeartFlow holds a leading position in the FFRCT market that the bank views as sustainable, with room for additional share gains. The same survey signals growing physician acceptance of HeartFlow’s plaque analysis capabilities. Wells Fargo points to HeartFlow’s first-mover advantage in AI-enabled diagnosis and management of coronary artery disease - a condition the bank notes remains a leading cause of death - as a strategic asset underpinning its growth thesis.
Valuation
Wells Fargo set a price target of $38 for HeartFlow, valuing the company at about 11 times its estimated 2027 revenue. The broker said this multiple reflects expectations for HeartFlow to outpace revenue growth among peers in high-growth healthcare, diagnostics, and software, along with margins that the bank sees as stronger than many healthcare companies.
Takeaway
The initiation ties expected expansion in CCTA volumes to higher adoption of HeartFlow’s FFRCT and plaque analysis products, forming the basis for an Overweight rating and a $38 price target predicated on above-peer sales growth and comparatively strong margins.