IRhythm Technologies, Inc.: Growth Reversal Will Leave Investors Heartbroken

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About: iRhythm Technologies, Inc. (IRTC)
by: Kerrisdale Capital Management
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Kerrisdale Capital Management
Hedge Fund Manager, Long/Short Equity, Value, Special Situations
Summary

iRhythm faces reimbursement cuts of 30-60% in the near future.

iRhythm faces formidable competition that it has (over)confidently dismissed.

The TAM for the Zio is much smaller than iRhythm suggests, and the effort to expand its product offering through the Zio AT has been a failure.

We are short shares of iRhythm Technologies (IRTC), a $2.3bn medical device company trading at over 15x sales despite facing multiple factors that will dramatically cut its revenue growth in the coming years.