On Thursday, Zynex Inc. (NASDAQ:ZYXI) shares received an updated price target from H.C. Wainwright following the release of its third-quarter financial performance. The firm's analyst maintained a Buy rating on the stock and increased the price target to $17.00 from the previous $16.00.
Zynex, a medical technology company specializing in pain management, reported a third-quarter revenue of $50.0 million, marking a year-over-year growth of 0.1% and aligning closely with projections. The company's net income exceeded expectations at $2.4 million, or $0.07 per share, surpassing the estimated $1.7 million.
The company's management highlighted a 13% year-over-year growth in orders during the third quarter of 2024 and a 25% increase in revenue per sales representative, reaching approximately $530,000. Zynex plans to accelerate the hiring of new sales representatives while ensuring high productivity standards are met.
Looking ahead, Zynex's management anticipates a return to normal topline growth rates in its pain management division, projecting around a 20% increase in 2025. The company's NiCO CO-Oximeter, which is expected to receive FDA clearance within the next year, is also anticipated to contribute to growth, although pain management products will remain the primary growth driver.
For the fourth quarter of 2024, Zynex expects revenues of at least $53.6 million and diluted earnings per share (EPS) of at least $0.09. The full-year revenue guidance for 2024 has been reaffirmed at a minimum of $200 million, with diluted EPS expected to be at least $0.20. Based on these figures, H.C. Wainwright estimates Zynex's market value at approximately $533 million, or $17 per share, leading to the revised price target.
In other recent news, Zynex Inc. has reported an 11% year-over-year growth in its Q2 2024 financial results, with total revenue reaching $49.9 million and net income at $1.2 million. Despite these figures falling short of analysts' expectations, the company noted a 20% increase in orders during the quarter.
Zynex also announced FDA clearance for its new TensWave device, a notable addition to its product line aimed at delivering TENS therapy for pain relief. This development is expected to cater to a wider range of insurance coverage scenarios.
These are recent developments in the company's ongoing efforts to enhance patient outcomes with innovative medical technology and improve its financial health. Zynex's future plans include potential increases in the sales force in 2025, with pain management products projected to remain the primary growth driver.
InvestingPro Insights
To complement the analysis provided by H.C. Wainwright, InvestingPro data offers additional insights into Zynex Inc.'s financial position. The company's market capitalization stands at $272.67 million, which is notably lower than the $533 million valuation estimated by H.C. Wainwright. This discrepancy suggests potential upside if the analyst's projections materialize.
Zynex's revenue for the last twelve months as of Q2 2024 was $193.61 million, with a growth rate of 9.11%. This aligns with the company's guidance of at least $200 million for the full year 2024, indicating they are on track to meet their targets. The gross profit margin is impressive at 80%, reflecting the company's strong pricing power in the pain management market.
An InvestingPro Tip highlights that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This aligns with the positive outlook provided by Zynex's management regarding future growth rates and the potential impact of new products like the NiCO CO-Oximeter.
It is worth noting that Zynex is trading at a high P/E ratio of 47.4, which could be justified by the expected growth but also indicates that investors are pricing in significant future earnings increases. For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Zynex Inc., providing a deeper understanding of the company's financial health and market position.
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