NEW YORK, NY / ACCESSWIRE / May 15, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Zynex, Inc. (OTCQB: ZYXI).
The report is available here: ZYXI May Update Note.
Based in Lone Tree, CO, Zynex, Inc. (OTCQB: ZYXI), "Zynex" produces medical devices that utilize electrotherapy to treat pain and rehabilitation. The company's flagship product, NexWave™, is an FDA-cleared electrotherapy medical device that offers non-invasive, non-addictive treatment of chronic and acute pain. With a growing active installed base of over 50,000 devices, NexWave™ provides Zynex with a high margin revenue stream with recurring attributes from supplies and consumables. Beyond NexWave™, Zynex offers additional solutions for pain management, neuro-monitoring and stroke recovery. Zynex is in the process of completing an impressive turnaround, and appears well-positioned for growth. Upcoming catalysts include continued execution in NexWave™ and possible regulatory clearance for the CM1500, a new class 2 device targeting the large unmet need for post-surgery blood volume monitoring. Zynex has also announced its intention to uplist shares to a national exchange - likely the NYSE American or Nasdaq CM - which has potential to raise its visibility in its industry as well as among institutional investors restricted from investing in OTC companies.
Highlights from the update include:
Zynex reports strong annual growth in 1Q18
On May 8, 2018, Zynex released positive 1Q18 results, in which the company reported strong top line growth and continued profitability in a seasonally challenging quarter. Highlights were as follows:
- 1Q18 revenues grew by 100.1% to reach $6.88mn, versus $3.44mn in 1Q17. Results were above the midpoint of guidance and were driven by strong product supply sales, which rose to $5.29mn versus $2.05mn in 1Q17.
- Adjusted EBITDA increased to $2.04mn in 1Q18, up 258% versus $0.57mn during the prior year quarter. Adjusted EBITDA margins expanded to 29.7% of revenues, versus 16.6% of revenues in 1Q17.
- 1Q18 GAAP EPS was $0.06, versus $0.01 in 1Q17. 1Q18 Net income increased by more than 400% annually to reach $1.92mn. Zynex generated approximately $1mn of cash from operating activities during the quarter and has repurchased $1.8mn of shares in 2018.
- Zynex guided to 2Q18 revenues of $7.5 - $8.0mn and adjusted EBITDA of $2.5mn to $3.0mn, which suggests an annual growth rate of greater than 50% in 2Q18 and 12.7% sequential growth over 1Q18.
Execution continues in 1Q18
Zynex continues to report strong momentum in the market as management reported 1Q18 results at the high end of its guidance in a quarter with seasonal headwinds due to higher patient out of pocket expenses at the beginning of the year, and issued a positive outlook for 2Q18. The company appears to be driving growth with strong sales execution, and better penetration of a growing installed base of NexWave devices. 1Q18 marked the seventh consecutive quarter of profitability for Zynex, as the company continues to benefit from demand for supplies and new device sales for its lead product NexWave as a non-invasive means to treat chronic and acute pain without side effects. We expect growth throughout the year, as the company invests resources into its direct sales force, which increased by 25 to reach 135 sales reps.
Raising estimates and price target to $6.75
We are raising our price target and top line estimates following strong results. We expect Zynex to generate FY2018 revenues of $32.0mn. The company also announced an additional $2mn share buyback program after repurchasing 495,091 shares from December 2017 through March 6, 2018. Our price target increases to $6.75, which represents a fair value multiple of 22.3x our 2018E EPS estimate of $0.30, and 20.7x our fully taxed 2019E estimate of $0.33.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About Zynex, Inc.
Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company's proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. Zynex is also developing a new blood volume monitor for use in hospitals and surgery centers. www.Zynex.com.
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
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SOURCE: SeeThruEquity