Vericel Corporation (VCEL): A Bull Case Theory

We came across a bullish thesis on Vericel Corporation on R.Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on VCEL. Vericel Corporation’s share was trading at $36.26 as of July 17th. VCEL’s trailing and forward P/E were 742.40 and 416.67, respectively according to Yahoo Finance.

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Vericel Corporation (VCEL) stands at a pivotal inflection point as a newly profitable, high-growth leader in the niche regenerative medicine markets of sports medicine and severe burn care. Having transitioned from a speculative, cash-burning biotech to a disciplined, self-funding commercial enterprise, the company now operates with a debt-free balance sheet, rapidly expanding operating cash flow, and powerful growth catalysts.

Its sports medicine franchise, anchored by MACI, remains the cornerstone of performance, generating $197.3 million in 2024 and supported by the transformative launch of MACI Arthro, which expands accessibility through minimally invasive delivery. Early adoption metrics are strong, with a rapidly growing surgeon base and biopsy volumes signaling durable demand.

The burn care franchise, comprising Epicel and the recently launched NexoBrid, provides a second growth engine, with burn care revenue up 22% in 2024 and NexoBrid posting 207% year-over-year growth in Q1 2025. With under 7% market penetration across both segments, Vericel’s 20%+ revenue growth trajectory is driven by execution rather than market expansion, significantly de-risking the outlook.

Profitability is scaling even faster, with 2024 gross margins of 73% and record Q4 margins of 78%, while adjusted EBITDA rose 58% on 20% revenue growth. Capital intensity is set to decline as major investments in its new Burlington manufacturing facility wind down, driving a steep inflection in free cash flow.

Valuation remains compelling, with a DCF estimate of $62.50, Owner Earnings valuation of $55.15, and a 5-year forward IRR of 21.5%, supporting a $59 price target, ~48% above the current $39.93. Vericel offers a compelling buy for investors seeking a high-quality, de-risked growth story.

Previously, we covered a bullish thesis on Gilead Sciences, Inc. (GILD) by Disruptive analytics in February 2025, which highlighted its resilience despite headwinds from the Inflation Reduction Act, currency strength, and lower COVID-related hospitalizations. The stock has appreciated about 4.53% since our coverage as growth stayed muted, but structural fundamentals remain intact. OppCost shares a similar view on Vericel Corporation (VCEL), emphasizing its high-growth, de-risked regenerative medicine portfolio and accelerating profitability.

Vericel Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held VCEL at the end of the first quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of VCEL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VCEL and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.