Zynex (ZYXI) AI Stock Analysis

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Zynex

(NASDAQ:ZYXI)

38Underperform

Zynex's stock reflects substantial financial distress and negative momentum. Revenue and profit declines, coupled with high leverage, are critical issues. The earnings call provided some long-term growth opportunities but was overshadowed by current challenges. Technical analysis confirms bearish sentiment, and the lack of dividend yield and negative P/E ratio further weigh down valuation.

Positive Factors

Financial Stability

The company has sufficient capital to fund its operations for the upcoming year, with $39.6M in cash at the end of December 2024.

Payor Coverage Expansion

Zynex is set to expand its payor coverage, which could help mitigate some of the short-term sales decline.

Product Innovation

If cleared by the FDA, NiCO would allow Zynex to enter the multi-billion dollar pulse oximetry market with differentiating precision and accuracy.

Negative Factors

Competition

Risks include slower-than-anticipated revenue growth of pain management products due to competition.

Regulatory Risks

There is a potential risk of inability to secure regulatory clearance for other medical devices.

Revenue Decline

Total revenue was $26.6M, representing a 43% YoY decline and missing our projection of $31.5M.

Zynex (ZYXI) vs. S&P 500 (SPY)

Market Cap

$61.38M

Dividend YieldN/A

Average Volume (3M)263.83K

Price to Earnings (P/E)24.1

Beta (1Y)1.19

Revenue Growth-8.63%

EPS Growth-202.31%

CountryUS

Employees1,000

SectorHealthcare

Sector Strength53

IndustryMedical - Distribution

Share Statistics

EPS (TTM)-0.33

Shares Outstanding30,238,876

10 Day Avg. Volume323,987

30 Day Avg. Volume263,828

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.93

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit0.78

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$6.00

Price Target Upside188.46% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Zynex Business Overview & Revenue Model

Company DescriptionZynex, Inc. (ZYXI) is a medical technology company that specializes in the development, manufacturing, and sale of non-invasive medical devices for pain management, physical rehabilitation, neurological diagnosis, and cardiac monitoring. The company's products are primarily focused on electrotherapy and include devices like the NexWave, which provides pain relief and muscle rehabilitation through electrical stimulation. Zynex operates within the healthcare sector, targeting both the consumer and professional medical markets.

How the Company Makes MoneyZynex makes money through the sale and rental of its proprietary medical devices. The company generates revenue primarily from direct sales to healthcare providers, clinics, and patients, as well as through rentals of its devices. A significant portion of Zynex's revenue comes from insurance reimbursements for the use of its products, which are prescribed by healthcare professionals. The company also benefits from recurring revenue through consumable supplies and accessories related to its devices. Additionally, Zynex has established partnerships and distribution agreements to expand its reach within the medical device market, further contributing to its earnings.

Zynex Financial Statement Overview

Summary

Zynex is facing significant financial challenges. Declining revenue and net income, negative profitability margins, high leverage, and deteriorating cash flow are concerning. Strategic interventions on revenue growth and cost control are essential.

Income Statement

Neutral

Zynex's income statement shows a troubling trajectory with declining revenue and net income in the TTM period. Gross Profit Margin remains relatively strong at 77.7% TTM, but significant drops in EBIT and EBITDA margins to negative values signal operational challenges. The revenue growth rate has been negative in the most recent period, indicating potential demand issues. Continued focus on cost management and revenue recovery is essential.

Balance Sheet

Negative

The balance sheet highlights a high debt-to-equity ratio of 3.52, indicating substantial leverage and potential financial risk. Equity ratio is low at 19.6%, reflecting high reliance on debt financing. Return on Equity has turned negative, further highlighting financial stress. Improvement in financial structure is needed to enhance stability.

Cash Flow

Negative

Cash flow analysis reveals a concerning negative free cash flow in the TTM period, coupled with a significant decrease in operating cash flow. The free cash flow to net income ratio is unfavorable, indicating cash generation issues. Enhanced cash management and operational efficiency are critical to reversing this trend.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
192.35M	184.32M	158.17M	130.30M	80.12M
	Gross Profit
152.93M	145.96M	126.16M	102.98M	62.70M
	EBIT
5.99M	10.78M	22.94M	22.37M	10.25M
	EBITDA
10.79M	17.89M	26.18M	22.37M	11.75M
	Net Income Common Stockholders
2.99M	9.73M	17.05M	17.10M	9.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.63M	44.58M	20.14M	42.61M	39.17M
	Total Assets
122.08M	136.90M	116.47M	133.27M	72.17M
	Total Debt
73.82M	76.17M	26.96M	35.09M	7.33M
	Net Debt
34.19M	31.59M	6.82M	-7.52M	-31.84M
	Total Liabilities
86.37M	90.78M	50.11M	59.35M	15.32M
	Stockholders Equity
35.71M	46.13M	66.36M	73.92M	56.85M
Cash Flow		Free Cash Flow
12.14M	16.55M	13.33M	6.34M	-167.00K
	Operating Cash Flow
12.72M	17.76M	13.75M	6.95M	818.00K
	Investing Cash Flow
-578.00K	-966.00K	-418.00K	-16.61M	-985.00K
	Financing Cash Flow
-17.09M	7.64M	-35.80M	13.10M	25.30M

Zynex Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.08

Price Trends

50DMA

3.34

Negative

100DMA

5.64

Negative

200DMA

6.92

Negative

Market Momentum

MACD

-0.30

Negative

RSI

40.44

Neutral

STOCH

45.05

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZYXI, the sentiment is Negative. The current price of 2.08 is below the 20-day moving average (MA) of 2.19, below the 50-day MA of 3.34, and below the 200-day MA of 6.92, indicating a bearish trend. The MACD of -0.30 indicates Negative momentum. The RSI at 40.44 is Neutral, neither overbought nor oversold. The STOCH value of 45.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZYXI.

Zynex Risk Analysis

Zynex disclosed 48 risk factors in its most recent earnings report. Zynex reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Zynex Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSIC	72 Outperform	$8.06B	20.59	11.78%	―	1.75%	8.76%
PBH	70 Neutral	$4.01B	18.99	12.63%	―	-1.41%	―
Sector *	52 Neutral	$5.23B	3.70	-41.86%	2.84%	16.58%	-0.16%
GRDN	47 Neutral	$1.63B	―		―	―	―
OMI	42 Neutral	$595.63M	―	-48.70%	―	3.55%	-757.75%
ZYXI	38 Underperform	$61.38M	24.14	-27.52%	―	-8.63%	-202.31%

* Healthcare Sector Average

Performance Comparison

ZYXI

Zynex

2.08

-8.65

-80.62%

HSIC

Henry Schein

66.57

-6.19

-8.51%

OMI

Owens & Minor

7.76

-10.36

-57.17%

PBH

Prestige Consumer Healthcare

81.41

11.56

16.55%

GRDN

Guardian Pharmacy Services, Inc. Class A

25.83

8.08

45.52%

Zynex Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: -6.73%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Negative

The earnings call presented a mix of positive developments such as the FDA submission for the NiCO pulse oximeter and cost reduction initiatives, but these were overshadowed by significant revenue decline, increased net loss, and uncertainty regarding the TriCare payment suspension, leading to a challenging financial outlook.

Q1-2025 Updates

Positive Updates

NiCO Pulse Oximeter FDA Submission

Zynex completed and passed all EMC and safety tests for their NiCO pulse oximeter and plans to submit to the FDA shortly. The product is expected to revolutionize the market by providing accurate readings regardless of skin pigmentation, with commercialization anticipated in 2026.

Cost Reduction Measures

Zynex has reduced its corporate staff by 15%, leading to expected annual savings of approximately $35 million. This is part of a broader cost containment strategy to address current challenges.

Diversification of Revenue Streams

The company is targeting new growth areas such as personal injury and increased the proportion of its diversified product orders to 34% in Q1 2025, up from an average of 30% last year.

Strong Cash Position

Zynex maintains a strong balance sheet with $40 million in working capital and approximately $24 million of cash on hand.

Negative Updates

Significant Revenue Decline

Net revenue fell to $26.6 million in Q1 2025 from $46.5 million in Q1 2024, primarily due to a temporary payment suspension from TriCare and reduced sales force productivity.

TriCare Payment Suspension

TriCare temporarily suspended payments to Zynex during a compliance review, impacting revenue. The situation remains unresolved, and a decision is expected by June 9th.

Increased Net Loss

The company reported a net loss of $10.4 million or $0.33 per share in Q1 2025, compared to a net income of $10,000 in the same quarter last year.

Decrease in Gross Profit Margin

Gross profit margin decreased to 69% in Q1 2025 from 80% in Q1 2024.

Company Guidance

During the Zynex First Quarter 2025 Earnings Conference Call, the company provided guidance amidst challenges with TriCare's temporary payment suspension, impacting their financial results. Revenue for Q1 2025 was reported at $26.6 million, a significant decrease from $46.5 million in the same quarter of 2024, primarily due to TriCare and slowing order growth. The company announced a restructuring plan to operate without TriCare, leading to a 15% staff reduction, expected to save approximately $35 million annually. Despite these setbacks, the company is optimistic about future growth, particularly with the upcoming FDA submission for their NiCO pulse oximeter, which is anticipated to drive revenue in 2026. For Q2 2025, Zynex has projected revenue of $27 million with an EPS loss of $0.20, as they continue to adjust their operations and capitalize on new revenue opportunities.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.