The share price of medical device company NanoVibronix (NAOV) rose significantly last month after the company received approval for two of its primary products. However, given NAOV’s lack of profitability and premium valuation, can its stock hold its price rally? Find out.
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NanoVibronix, Inc. (NAOV) Elmsford, NY, a medical device company specializing in the manufacture of medical devices based on its unique low-intensity Surface Acoustic Wave (SAW) technology. The company’s primary products are PainShield and UroShield, portable devices that can be used at home without the intervention of medical personnel.
Shares of the company rose 46.6% last month after receiving NAOV approval for Penguard and Euroguard as licensed medical devices from Health Canada / Santa Canada.
However, the stock has declined 34.8% in the last six months. Furthermore, poor bottom-line performance of NAOV and near-term prospects of premium valuation may raise investor concerns.
Click here to check out our Healthcare Sector Report for 2022
Here’s how to shape NAOV’s performance in the near term:
Poor bottom line performance
NAOV’s revenue rose 232.7% year-on-year to $ 499,000 in the three months ended September 30, 2021. However, its Operating loss It rose 7.9% to $ 868,000 from a year earlier. Its net loss rose 623.9% to $ 6.68 million from the previous quarter, when the loss per share for the period was $ 0.26.
Premium valuation
Trailing-In terms of 12-month price / sell, the stock is currently trading at 27.25x, which is 365.2% higher than the 5.86x industry average. Also, its 24.61x trailing-12-month EV / sales is 369.8% higher than the 5.24x industry average. Furthermore, NAOV’s 3.79x trailing-12-month price / book is 39.6% higher than the 2.72x industry average.
Poor profitability
NAOV’s 0.15% trailing-12-month asset turnover ratio is 0.34%, 57.1% lower than the industry average. Its 53.4% trailing-12-month gross profit margin is 3.97% lower than the 55.6% industry average. Also, its trailing-12-month ROA, leveraged FCF margin and ROC are negative at 132.6%, 277.8% and 48.9%, respectively.
POWR ratings reflect uncertainty
NAOV has an overall F rating, which is equivalent to a strong sale under our ownership. POWR rating Method. POWR ratings are calculated based on 118 individual factors, each factor being weighed to an optimal degree.
Our proprietary rating system evaluates each stock based on eight distinct categories. NAOV has an F grade for quality and a D for quality. Consistent with higher rating standards than the company’s industry. In addition, its poor profitability is consistent with quality grades.
Out of 166 de-rated stocks Medical – devices and equipment Industry, NAOV ranked # 160
Beyond what I said above, one can see the NAOV rating for stability, speed, growth and feeling. Here.
The last row
Although NAOV’s recent product launches and continued efforts to obtain more clearances for its products have attracted significant investor attention and led to stock price rally, investors may be concerned about its potential based on NAOV’s lack of profitability. In addition, stiff competition in the medical device industry could further reduce its potential for growth. Therefore, we believe that it is better to avoid the stock now.
How NanoVibronix Inc. (NAOV) stacks up against his colleagues?
Although NAOV has an overall D rating, one might want to consider its industry counterparts, the Foner Corporation (FONR(Hood Medical Inc.)NTUS), And Electromed Inc. (ELMD), Which has an overall A (strong buy) rating.
Click here to check out our Healthcare Sector Report for 2022
NAOV shares fell $ 0.02 (-1.83%) in pre-market trading on Wednesday. Year-to-date, NAOV rose 4.81% over the same period as the benchmark S&P 500 Index rose -4.74%.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college he did a major in finance and is currently pursuing a CFA program and is a second tier candidate.
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