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Nephros
(NASDAQ:NEPH)
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Rating:65Neutral
Price Target:
$4.50
▲(6.64% Upside)
Action:Reiterated
Date:08/25/26
NEPH scores solidly on improving profitability and a conservatively financed balance sheet, reinforced by a constructive price trend and a positive earnings call highlighting strong revenue/profit growth. The overall score is held back primarily by weak recent cash conversion (negative TTM operating/free cash flow) and valuation risk with a P/E near 27 and no dividend yield provided.
Positive Factors
Recurring Revenue Growth
Growth in core programmatic products supports a durable installed-base model, because recurring filter replacements can expand revenue after initial installation. This improves visibility and gives Nephros an opportunity to deepen customer relationships over the next several quarters.
Negative Factors
Weak Cash Conversion
Negative operating and free cash flow despite positive earnings indicates that working capital is absorbing cash, particularly through receivables and inventory. If this persists, it could constrain self-funded growth and weaken the benefit of the company’s otherwise conservative financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Revenue Growth
Growth in core programmatic products supports a durable installed-base model, because recurring filter replacements can expand revenue after initial installation. This improves visibility and gives Nephros an opportunity to deepen customer relationships over the next several quarters.
Read all positive factors
Nephros (NEPH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$44.09M
Dividend YieldN/A
Average Volume (3M)29.61K
Price to Earnings (P/E)27.1
Beta (1Y)-0.20
Revenue Growth24.20%
EPS Growth28.29%
CountryUS
Employees36
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.16
Shares Outstanding10,860,120
10 Day Avg. Volume28,217
30 Day Avg. Volume29,605
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)5.08
Price to Sales (P/S)2.76
P/FCF Ratio31.48
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$6.38Price Target Upside51.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.13
Revenue Forecast (FY)$21.75M
Nephros Business Overview & Revenue Model
Company Description
Nephros, Inc. is a company that specializes in developing and marketing sophisticated water purification solutions across the United States, catering to both the medical and commercial sectors. Its operations are structured into three primary segm...
How the Company Makes Money
Nephros makes money primarily by selling water filtration products and related replacements to institutional customers. Its core revenue stream is product sales of point-of-use water filters and associated hardware (e.g., faucet/shower filtration ...
Nephros Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial progress: record quarterly revenue, robust programmatic and service growth, and significant improvements in net income and adjusted EBITDA. These positives were tempered by margin items—partly benefited by a one-time $600K tariff refund—and by cash flow pressures driven by rising inventory and receivables, ongoing tariff/FX/freight cost headwinds, and early-stage adoption of new products. Management emphasized durable, broad-based execution, ongoing investments in markets, services and education, and confidence in future growth, while acknowledging margin and cash conversion areas for improvement.Positive Updates
Record Quarterly Revenue
Net revenue of $6.0M in Q2 2026, the highest quarterly revenue in company history, up 36% year-over-year (from $4.4M) and approximately 15% sequentially from Q1 2026.
Negative Updates
One-Time Tariff Refund Impact on Gross Margin
Reported Q2 gross margin of ~67% (vs 63% in Q2 2025) was materially helped by a one-time tariff refund of approximately $600K that reduced cost of goods sold; only ~$100K of the refund related to inventory sold in Q2 2026 while ~$500K related to prior periods, meaning reported margin improvement is partly timing-driven.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Net revenue of $6.0M in Q2 2026, the highest quarterly revenue in company history, up 36% year-over-year (from $4.4M) and approximately 15% sequentially from Q1 2026.
Read all positive updates
Company Guidance
Guidance on the call was largely qualitative and execution-focused: management said H2 priorities are to serve existing customers, expand the installed base, increase installation and scheduled replacement services, improve underlying gross margins and broaden investor/market awareness while continuing investments in markets (Greater New York, Puerto Rico), the Nephros Water Institute and new product lines (PFAS, micro/nanoplastics, sterile processing, commercial). They reiterated margin headwinds from a continuing ~10% tariff, weaker USD vs. EUR and higher shipping, noting a one‑time $600k tariff refund (≈$300k applied to H1 2026 revenue and ≈$300k to prior-period inventory) that boosted reported Q2 gross margin to ~67% (Q2 2025: ~63%; H1 2026: ~63% vs 64% prior year on a reported basis); management expects margins to remain pressured. Operational targets are growth across channels rather than single-product dependence—Q2 revenue was $6.0M (+36% YoY, +15% sequential), programmatic product revenue +~27%, service revenue nearly tripled, H1 revenue $11.2M (+21% YoY)—and financial momentum included Q2 net income ~$1.2M (up >400%), adjusted EBITDA ~$1.3M (up 260%), cash of ~$4.7M (debt‑free), while R&D and SG&A investments continued (Q2 R&D +~18%, SG&A ~$2.4M +10%; H1 R&D $712k +17%, SG&A $4.9M +11%), with operating cash flow of $681k in Q2 but net cash used of $990k for the first 6 months.Nephros Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
44
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 20.72M | 18.79M | 14.16M | 14.24M | 9.97M | 10.22M |
| Gross Profit | 12.50M | 11.48M | 8.72M | 8.40M | 4.73M | 5.63M |
| EBITDA | 1.82M | 1.35M | 227.00K | -1.36M | -3.69M | -2.49M |
| Net Income | 1.74M | 1.19M | 74.00K | -1.57M | -7.38M | -4.11M |
Balance Sheet | ||||||
| Total Assets | 15.77M | 13.64M | 11.21M | 11.86M | 11.00M | 17.65M |
| Cash, Cash Equivalents and Short-Term Investments | 4.70M | 5.40M | 3.76M | 4.31M | 3.63M | 6.97M |
| Total Debt | 872.00K | 1.06M | 1.41M | 1.84M | 1.09M | 1.00M |
| Total Liabilities | 3.80M | 3.44M | 2.63M | 3.50M | 2.12M | 2.90M |
| Stockholders Equity | 11.97M | 10.20M | 8.59M | 8.36M | 5.59M | 11.70M |
Cash Flow | ||||||
| Free Cash Flow | -661.00K | 1.65M | -547.00K | 752.00K | -3.37M | -1.45M |
| Operating Cash Flow | -661.00K | 1.65M | -492.00K | 827.00K | -3.23M | -1.42M |
| Investing Cash Flow | 0.00 | 0.00 | -50.00K | -75.00K | -137.00K | -85.00K |
| Financing Cash Flow | 284.00K | -5.00K | -5.00K | -79.00K | 34.00K | 237.00K |
Nephros Technical Analysis
Positive
4.22
Price Trends
3.89
Positive
3.60
Positive
3.90
Positive
Market Momentum
0.09
Positive
54.26
Neutral
32.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEPH, the sentiment is Positive. The current price of 4.22 is below the 20-day moving average (MA) of 4.34, above the 50-day MA of 3.89, and above the 200-day MA of 3.90, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 54.26 is Neutral, neither overbought nor oversold. The STOCH value of 32.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NEPH.
Nephros Risk Analysis
Nephros disclosed 29 risk factors in its most recent earnings report. Nephros reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nephros Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $44.09M | 27.13 | 16.20% | ― | 24.20% | 28.29% | |
55 Neutral | $41.64M | -9.22 | -149.08% | ― | 3.72% | 43.78% | |
52 Neutral | $36.51M | -3.42 | -92.01% | ― | -1.06% | 82.17% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | $21.28M | -5.81 | -4.59% | ― | -11.16% | 59.85% | |
45 Neutral | $24.96M | -0.59 | -225.98% | ― | 21.86% | 73.27% |
* Healthcare Sector Average
NEPH
Nephros
4.36
-0.04
-0.91%
HBIO
Harvard Bioscience
7.95
3.58
81.71%
RVP
Retractable Technologies
0.70
-0.11
-13.58%
MLSS
Milestone Scientific
0.44
-0.20
-30.93%
FEMY
Femasys
2.68
-4.80
-64.17%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.