11:08 AM EDT, 09/23/2025 (MT Newswires) -- Hinge Health ( HNGE ) is likely to hit the high end of its long-term gross margin target of 82% to 85% by 2027 with the help of artificial intelligence, Morgan Stanley said in a note Tuesday.

The firm said increasing AI effectiveness should enable growth that is faster than the pace of operating expenses.

Morgan Stanley noted that a key driver of gross margin expansion to 78% in 2024 from 70% in 2023 was the rollout of TrueMotion's 3D motion tracking that cut human care team hours for physical therapy by about 95%.

The firm said its analysis shows that the company can support a care team ratio of 1,950:1 by 2027, compared with 1,215:1 in 2024, due to the adoption of AI to help scale the business.

Morgan Stanley raised its price target on Hinge Health ( HNGE ) to $67 from $57 and maintained its overweight rating.

The company's shares were up over 3% in recent trading.

Price: 59.94, Change: +2.10, Percent Change: +3.63