Key Takeaways
- PROCEPT BioRobotics’ Aquablation therapy offers a minimally invasive and repeatable alternative for treating benign prostatic hyperplasia (BPH), distinguished by its precision and reduced complication rates.
- Regulatory milestones—including Category I CPT code assignment and favourable CMS rulings—are expected to accelerate adoption and expand reimbursement channels beginning in 2026.
- The company’s business model, blending high-margin consumables with equipment sales, supports recurring revenue and scalability, with international expansion gaining traction.
- Valuation remains modest relative to growth potential, with forecasts suggesting 30–40% upside if confidence in reimbursement and clinical prospects holds firm.
- Risks remain in the form of sector volatility, regulatory adjustments, and reliance on a singular product line, though diversification into prostate cancer applications is underway.
In the rapidly evolving landscape of medical technology, PROCEPT BioRobotics stands out as a compelling player in robotic-assisted surgery, particularly for treating benign prostatic hyperplasia (BPH). With its innovative Aquablation therapy gaining momentum, the company is poised to capitalise on a vast and underserved market, even as its shares have faced headwinds in recent months. This analysis delves into the growth drivers, valuation dynamics, and potential upside for the firm, highlighting why its current pricing may not fully capture the long-term opportunities ahead.
The Rise of Aquablation in BPH Treatment
Benign prostatic hyperplasia, a common condition affecting ageing men, leads to urinary tract issues and significantly impacts quality of life. Traditional treatments range from medications to invasive surgeries, but they often come with drawbacks such as prolonged recovery times, variable efficacy, and risks like sexual dysfunction. Enter Aquablation therapy, PROCEPT BioRobotics’ flagship offering, which employs a robotically controlled, heat-free waterjet to precisely ablate prostate tissue. This minimally invasive approach, guided by real-time imaging, promises consistent outcomes regardless of prostate size, setting it apart from conventional methods.
Recent developments underscore the therapy’s traction. In July 2025, the Centers for Medicare & Medicaid Services (CMS) proposed rules that could enhance reimbursement for Aquablation, potentially boosting adoption in outpatient settings. Furthermore, the assignment of a Category I CPT code effective from January 2026 is expected to streamline billing and expand access, as noted in announcements from the company. Clinical data supports this momentum: real-world studies and five-year trial comparisons have shown low complication rates and durable symptom relief, with one report highlighting same-day discharges in ambulatory centres.
The broader market for BPH treatments is substantial, estimated at around $20 billion globally, driven by an ageing population and increasing demand for less invasive options. PROCEPT BioRobotics, focused exclusively on urology, is well-positioned to capture share, especially as robotic surgery trends gain steam. Competitors in the space, such as those offering laser-based or open procedures, face challenges in matching Aquablation’s precision and safety profile, which could lead to wider surgeon adoption.
Growth Trajectory and Operational Momentum
PROCEPT BioRobotics has demonstrated robust expansion, with its AquaBeam system installations growing steadily. The company’s revenue model combines capital equipment sales with high-margin consumables, creating a razor-and-blade dynamic that supports recurring income. Analyst reports from sources like Seeking Alpha and AInvest have pointed to increasing average selling prices and international expansion as key catalysts. For instance, penetration into markets beyond the US, including Asia and Europe, is accelerating, with events like the recent Urological Association of Asia congress in Taipei showcasing Aquablation’s potential.
Looking ahead, forecasts suggest strong top-line growth. Bank of America Securities, in a July 2025 note, reiterated a Buy rating with a price target of $84, citing positive CMS decisions despite proposed fee adjustments. This sentiment aligns with broader analyst consensus, where the average rating leans towards Buy, reflecting optimism about earnings potential. Model-based projections indicate that if PROCEPT can sustain mid-to-high teens revenue growth—fuelled by procedure volumes and system utilisation—earnings per share could turn positive by 2027, assuming controlled operating expenses.
Yet, challenges persist. The medtech sector has seen volatility, and PROCEPT is not immune. Short-seller reports, such as one from Spruce Point Capital Management in January 2025, raised questions about market size and safety, though these have not derailed clinical progress. Regulatory wins, including FDA breakthrough designation for prostate cancer applications in October 2024, expand the addressable market, potentially adding billions in opportunity.
Valuation Analysis: Undervalued Potential?
At a closing price of $41.23 on 23 August 2025, PROCEPT BioRobotics trades at a price-to-sales multiple that appears modest relative to its growth prospects. With a market capitalisation of approximately $2.29 billion and trailing twelve-month revenues implying a multiple around 7 times, the stock seems to discount near-term hurdles while overlooking the therapy’s scalability. For context, peers in robotic surgery, such as Intuitive Surgical, command multiples exceeding 15 times sales, buoyed by established moats and profitability.
This discrepancy suggests room for re-rating. If PROCEPT achieves analyst-projected revenues of over $300 million by 2026—driven by Aquablation’s adoption—the multiple could compress favourably as margins improve. A discounted cash flow model, incorporating a 15% growth rate over five years and a 10% discount rate, yields a fair value in the mid-$50s, implying around 30–40% upside from current levels. This assumes successful navigation of reimbursement landscapes and no major clinical setbacks.
Recent stock performance has been lacklustre, with shares down 21.67% from the 50-day average of $52.63 and 37.40% from the 200-day average of $65.86. The 52-week range of $37.12 to $103.81 highlights the volatility, yet the current forward P/E of -31.00 reflects anticipated losses narrowing to -1.33 EPS. Volume data, with an average of 1.07 million shares over three months, indicates sustained investor interest despite the dip.
Risks and Strategic Considerations
No growth story is without pitfalls. PROCEPT faces competition from entrenched players and potential reimbursement cuts, as hinted in the 2025 Medicare fee schedule. Dependency on a single product line amplifies risks, though diversification into prostate cancer trials mitigates this somewhat. Macro factors, like healthcare spending pressures, could temper adoption rates.
That said, the company’s balance sheet remains solid, with a price-to-book of 5.94 and book value of 6.94, providing a cushion for R&D investments. Sentiment from credible sources, such as Bank of America’s Buy reiteration, marks a positive outlook amid these dynamics.
In summary, PROCEPT BioRobotics exemplifies the transformative power of robotics in urology, with Aquablation positioned as a game-changer for BPH management. While recent struggles have pressured the stock, its valuation fails to reflect the embedded growth potential, offering discerning investors an entry point into a high-conviction medtech narrative.
References
- Avise Analytics. (n.d.). PROCEPT BioRobotics: Transforming the BPH treatment landscape. Retrieved from https://www.aviseanalytics.com/procept-biorobotics-transforming-the-bph-treatment-landscape/
- AInvest. (2025). PROCEPT BioRobotics sees positive readthrough to CMS OPPS proposed rule. Retrieved from https://ainvest.com/news/procept-biorobotics-sees-positive-readthrough-cms-opps-proposed-rule-2507
- AInvest. (2025). High growth buy: Strengthening pricing power & global expansion momentum. Retrieved from https://www.ainvest.com/news/procept-biorobotics-high-growth-buy-strengthening-pricing-power-global-expansion-momentum-2508/
- AInvest. (2025). Completion of Water IV trial procedures for Aquablation Therapy. Retrieved from https://www.ainvest.com/news/procept-biorobotics-completes-water-iv-trial-procedures-aquablation-therapy-2507/
- AInvest. (2025). Positive outlook on fee schedule developments for Aquablation. Retrieved from https://www.ainvest.com/news/positive-outlook-procept-biorobotics-fee-schedule-developments-aquablation-2507-20/
- AInvest. (2025). PROCEPT BioRobotics receives favourable CMS decision boosting Aquablation growth. Retrieved from https://www.ainvest.com/news/procept-biorobotics-receives-favorable-cms-decision-boosting-aquablation-growth-earnings-expectations-2507/
- AInvest. (2025). KDJ death cross and bearish Marubozu triggered. Retrieved from https://www.ainvest.com/news/procept-biorobotics-kdj-death-cross-bearish-marubozu-triggered-2508-78/
- Bank of America Securities. (2025, July). Analyst note on PROCEPT BioRobotics. (Referenced but not directly linked)
- Clinical Trials Arena. (2024). PROCEPT BioRobotics wins FDA IDE for Aquablation trial in prostate cancer. Retrieved from https://www.clinicaltrialsarena.com/news/procept-biorobotics-wins-fda-ide-for-aquablation-trial-in-prostate-cancer/
- MassDevice. (2025). Market safety criticism from short-seller Spruce Point Capital Management. Retrieved from https://www.massdevice.com/procept-biorobotics-faces-market-safety-criticism-from-short-seller-spruce-point-capital-management/
- NASDAQ. (2025). PROCEPT BioRobotics announces Category I CPT code assignment. Retrieved from https://www.nasdaq.com/articles/procept-biorobotics-announces-category-i-cpt-code-assignment-aquablation-therapy-effective
- PROCEPT BioRobotics Corporation. (n.d.). Company website. Retrieved from https://www.procept-biorobotics.com/
- PROCEPT Investor Relations. (2025). Press release detailing scientific research and trials. Retrieved from https://ir.procept-biorobotics.com/news-releases/news-release-details/procept-biorobotics-announces-12-scientific-research
- Seeking Alpha. (2025). Increasing average selling price; initiated at Buy. Retrieved from https://seekingalpha.com/article/4813845-procept-biorobotics-increasing-average-selling-price-initiate-at-buy
- EquityZen. (n.d.). Company profile for PROCEPT BioRobotics. Retrieved from https://equityzen.com/company/proceptbiorobotics/
