NEW YORK, NY / ACCESSWIRE / March 5, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update on Nephros, Inc. with a target price of $1.80.
The report is available here: March 2018 Update Note.
Based in South Orange, NJ, Nephros, Inc. (OTCQB: NEPH) ("Nephros") is a commercial stage medical device company, with innovative filtration products targeting large market opportunities including hospital infection control and advanced renal care. Nephros was founded by two healthcare professionals associated with Columbia University Medical Center / New York Presbyterian Hospital to develop a hemodiafiltration (HDF) device as an alternative to hemodialysis. Nephros has developed proprietary technology to accomplish this goal, and in addition to commercializing an HDF System, Nephros has also developed advanced filtration devices for a variety of applications where ultrapure filtration is of potential value.
On February 26, 2018, Nephros reported impressive full year 2017 results which were above our expectations, with highlights as follows:
- Revenues grew by 65% YOY in FY2017 to reach $3.8mn versus $2.3mn in FY2016. 4Q17 revenues were up 75% to $1.3mn.
- Nephros issued FY2018 guidance for continued growth, with management calling for revenues of over $6mn for the year.
- Nephros ended the year in a healthy cash position with cash on hand of just under $2.2mn.
- For the full year 2017, EPS came in at ($0.02), an improvement versus ($0.06) in 2016.
Nephros reported strong top line results in 4Q17 with revenues rising to $1.30mn, up sequentially from $0.92mn in 3Q17, and an increase of 74.6% from 4Q16 revenues of $745,000. For the full year, revenues came in at $3.81mn, ahead of our estimate of $3.43mn, and up approximately 65% from 2016 revenues of $2.32mn. Management attributed the strong execution of the company's expanded sales distribution and the performance of hospital infection control filter products.
Growth expected in 2018
Nephros expects strong growth to continue in 2018. Management issued guidance for revenues to surpass $6mn in 2018, with sequential top line growth expected to average 10% to 12% throughout the year. Key initiatives expected in 2018 include continued expansion of the company's core hospital infection control revenues, as the number of hospitals serviced by Nephros is expected to rise. Additionally, the company will add emergency support products for legionella outbreaks, including same day delivery options, as well the continued launch of the company's EndoPur™ Endotoxin filter for the dialysis market, and expanded filter sales activity for the commercial / industrial markets. The company completed a post-market evaluation of its Hemodiafiltration (HDF) System at Vanderbilt University. The company expected to leverage this data to develop a second generation product designed to lower costs and improve the efficiency of performing HDF. We continue to see HDF as a large potential opportunity which could drive growth in future years.
Raising price target to $1.80
We increase our price target to Nephros to $1.80 following better than expected 4Q17 results and guidance for growth in 2018E. We view Nephros as an intriguing high risk / high reward growth company in the medical instruments industry with several potential catalysts ahead in hospital infection control, dialysis and commercial filter markets.
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About Nephros, Inc.
Nephros is a commercial stage medical device company that develops and sells high performance liquid purification filters, as well as a hemodiafiltration system for the treatment of patients with End Stage Renal Disease. Nephros filters or ultrafilters are used primarily in medical applications in various settings. Nephros ultrafilters are used in hospitals and medical clinics for added protection in retaining bacteria (i.e. Legionella, Pseudomonas), virus and endotoxin from water. These ultrafilters provide barriers that assist in improving infection control with showers, sinks, and ice machines. Additionally, these ultrafilters are used by dialysis centers for assisting in the removal of biological contaminants from the water and bicarbonate concentrate supplied to hemodialysis machines and the patients. www.nephros.com.
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