Sometimes the market shoots first and asks questions later. That appears to be what happened to iRhythm Technologies Inc. (IRTC) this week after the digital health company delivered a mixed bag of news that sent shares tumbling roughly 20%. But according to William Blair analyst Brandon Vazquez, investors just got handed a buying opportunity.

Here's what actually happened. On Monday, iRhythm shared preliminary fourth-quarter highlights that were actually pretty good. The company said full-year 2025 revenue would exceed the high end of its previous guidance range of $740 million, powered by record revenue unit volume in Q4. Analysts had been expecting $737.95 million, so beating that handily should be cause for celebration, right?

Well, yes and no. The company also laid out its 2026 outlook, projecting revenue of approximately $870 million to $880 million. That represents solid year-over-year growth of 17% to 18%, and it's actually above the consensus estimate of $862.68 million. iRhythm also expects an adjusted EBITDA margin of roughly 11.5% to 12.5% for the year.

The Zio MCT Delay

So what spooked investors? Two things, really. First, the company formally pushed back the launch of its Zio MCT product into 2027. Second, while the guidance technically beat consensus, it apparently didn't meet the more optimistic expectations some investors were nursing. The result was a swift 20% haircut to the stock price.

William Blair thinks that reaction is way overdone. In a note published Wednesday, Vazquez wrote: "Bottom line, we believe the stock weakness is overblown, and investors should take advantage of this opportunity to buy shares." The firm is so confident, in fact, that it added iRhythm to the William Blair Analyst Conviction List, citing "the favorable setup for growth and rapid reset in valuation in the past three days."

The firm maintains its Outperform rating on the stock, which now trades at just 7 times 2026 sales after the selloff. That's a pretty attractive entry point for a company delivering high-teens revenue growth.

Growth Catalysts Remain Intact

About that Zio MCT delay: management had actually hinted at this possibility on the third-quarter earnings call, but this week's conference made it official. William Blair notes that based on conversations with management, there don't appear to be any FDA questions that iRhythm can't address within a reasonable timeframe. The 2027 launch target also builds in flexibility if the agency requests additional changes.

Sure, losing a near-term catalyst stings. But as Vazquez points out, it doesn't change the fundamental investment thesis. CEO Quentin Blackford laid out an ambitious growth roadmap in Monday's press release: "As we enter 2026, we're well-positioned to accelerate our leadership with multiple growth catalysts ahead, including deepening penetration in primary care and population health through AI-powered risk stratification partnerships, momentum within mobile cardiac telemetry, expansion into adjacent markets such as obstructive sleep apnea, and continued international execution."

That's a lot of ways to win beyond just Zio MCT. And with the stock now trading at a significantly cheaper valuation, William Blair argues investors are getting paid to wait for those catalysts to play out.

IRTC Price Action: iRhythm shares were up 1.23% at $155.44 at the time of publication on Wednesday.