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Brainsway (BWAY) AI Stock Analysis

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IL:BWAY

Brainsway

(TASE:BWAY)

Select Model
Rating:69Neutral
Price Target:ILA 4,088.00â–²(9.51% Upside)
Action:downgraded
Date:08/18/26

The score is driven primarily by improved financial fundamentals (profitability turnaround, strong gross margins, low leverage) and a notably positive earnings update with raised guidance and accelerating margins. These strengths are tempered by cash-flow volatility in 2026 TTM, a neutral-to-mixed technical picture, and a high P/E valuation that offers little margin for error.

Positive Factors
Accelerating revenue growth and raised guidanceStrong quarterly growth and higher full-year guidance indicate expanding demand and improving commercial execution. If sustained, this trajectory can enlarge the installed base, strengthen operating leverage, and provide a durable foundation for recurring revenue over the next several quarters.
Negative Factors
Volatile cash conversion and free cash flowThe mismatch between stronger earnings and weaker recent cash conversion indicates that profitability has not translated consistently into cash. Continued volatility could constrain internally funded growth and make financial performance more sensitive to working-capital swings or higher cash costs.

Brainsway (BWAY) vs. iShares MSCI Israel ETF (EIS)

-20%0%20%40%60%80%100%IL:BWAY+34.62%EIS+13.14%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
Market Cap
ILS 1.50B
Dividend Yield
―
Average Volume (3M)
80.20K
Price to Earnings (P/E)
49.2
Beta (1Y)
0.60
Revenue Growth
14.06%
EPS Growth
44.16%
Country
Israel
Employees
129
Sector
General
Sector Strength
55
Industry
Medical - Specialties

Brainsway Business Overview & Revenue Model

Company Description

Established in Jerusalem, Israel, in 2003, BrainsWay Ltd. specializes globally in creating and distributing advanced, non-invasive neurostimulation therapies designed to address a wide array of mental health and neurological conditions. The company's...

How the Company Makes Money

BrainsWay primarily makes money by selling and/or leasing its Deep TMS systems to healthcare providers (such as psychiatry and neurology clinics) and generating ongoing revenue tied to the installed base of systems. Key revenue streams typically incl...

Brainsway Earnings Call Summary

Earnings Call Date:Aug 11, 2026(Q2-2026)|% Change Since:-17.59%|Next Earnings Date:Nov 09, 2026
Earnings Call SentimentPositive

The call portrayed strong operational and financial momentum: robust revenue growth (+35%), substantial margin and profitability expansion (operating income >300%, adjusted EBITDA +141%, margin expansion to 20%), growing installed base (+42% systems placed) and a larger, more visible backlog (+30% RPO). Clinical and reimbursement progress (SWIFT durability data, 57M covered lives, >83% PTSD response in a 462‑patient study) and strategic minority investments support a multi‑year growth thesis. Notable cautions include rising R&D and G&A spend, uneven reimbursement adoption across markets, conditionality/uncertainty around Neurolief and wide forecast ranges for margins/EBITDA, and revenue timing risk from backlog. On balance, positive operational trends, cash strength and improved visibility outweigh the highlighted risks.

Positive Updates

Strong Revenue Growth and Upgraded Guidance
Revenue grew 35% year-over-year to $17.1M in Q2 2026 (vs. $12.6M LY). Company raised full-year 2026 revenue guidance to $68M–$70M (implying ~30%–34% Y/Y growth).

Negative Updates

Rising R&D and General & Administrative Costs
R&D increased to $3.2M from $2.3M (≈+39% YoY) driven by clinical development (PTSD, alcohol use disorder). G&A rose to $2.3M from $1.6M (≈+44% YoY), driven by higher professional fees and administrative costs — increasing operating expense pressure despite margin expansion.

Company Guidance

Management raised full‑year 2026 revenue guidance to $68–70 million (up from $66–68M), implying ~30–34% year‑over‑year growth, and narrowed targets for operating margin to 13.5%–40% of revenue and adjusted EBITDA to $13–40 million (roughly +90% to +100% vs. 2025). The raise reflects strong first‑half momentum including Q2 revenue of $17.1M (+35% y/y), operating income of $2.4M (up >300%), net income of $2.7M (+34%), adjusted EBITDA of $3.5M (+141%) with a 20% adjusted EBITDA margin (vs. 11% prior year), gross margin of 75%, and operating margin of 14% (vs. 5% a year ago). Management cited growing visibility from an installed base of ~1,950 systems (125 shipped in Q2, +42% y/y), remaining performance obligations of $80.4M (+30% y/y), $62.4M cash, and Q2 operating cash flow of $6.3M as the basis for the higher guidance.

Brainsway Financial Statement Overview

Summary

Strong operating turnaround with meaningful revenue growth and sustained profitability (strong ~74–75% gross margins) plus a conservatively financed balance sheet (low leverage, expanding equity). The main drag is cash-flow quality: 2026 TTM shows a sharp free-cash-flow step-down and weaker cash conversion versus 2025, indicating volatility despite improved earnings.

Income Statement

78Positive

Balance Sheet

84Very Positive

Cash Flow

62Positive
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue64.77M56.53M41.02M31.79M27.18M29.66M
Gross Profit48.80M42.63M30.58M23.48M20.05M23.06M
EBITDA6.82M6.22M5.36M-2.56M-11.45M-4.67M
Net Income9.46M8.26M2.92M-4.20M-13.35M-6.46M
Balance Sheet
Total Assets121.97M112.94M94.32M62.97M64.48M75.73M
Cash, Cash Equivalents and Short-Term Investments61.94M69.13M69.34M45.98M47.85M57.35M
Total Debt7.13M6.82M5.62M471.00K488.00K754.00K
Total Liabilities42.79M34.67M32.00M21.39M19.08M18.41M
Stockholders Equity79.19M73.24M62.31M41.58M45.40M57.32M
Cash Flow
Free Cash Flow5.46M16.27M6.50M-1.10M-7.82M-1.35M
Operating Cash Flow7.12M18.02M10.30M1.28M-9.76M884.00K
Investing Cash Flow-11.40M-17.49M30.31M-37.41M42.17M-42.22M
Financing Cash Flow-2.23M-2.21M18.26M-1.03M-1.55M41.52M

Brainsway Technical Analysis

Technical Analysis SentimentNeutral
Last Price3733.00

Price Trends

50DMA4014.82Negative
100DMA4279.90Negative
200DMA4205.50Negative

Market Momentum

MACD-115.22Negative
RSI48.83Neutral
STOCH62.12Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:BWAY, the sentiment is Neutral. The current price of 3733.00 is above the 20-day moving average (MA) of 3625.10, below the 50-day MA of 4014.82, and below the 200-day MA of 4205.50, indicating a neutral trend. The MACD of -115.22 indicates Negative momentum. The RSI at 48.83 is Neutral, neither overbought nor oversold. The STOCH value of 62.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IL:BWAY.

Brainsway Peers Comparison

Overall Rating

UnderperformOutperform
Sector (55)

Financial Indicators

IL:BWAY against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
IL:SOFWIL:SOFW76OutperformILS 1.32B45.65――30.12%―
IL:BWAYIL:BWAY69NeutralILS 1.50B49.1610.95%―14.06%44.16%
Sector *55Neutral$6.65B3.83-15.92%6.20%10.91%7.18%

* General Sector Average

Performance Comparison

-50%0%50%IL:BWAYIL:ILXIL:ALMDIL:EPITIL:SOFWIL:PLSMDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
IL:BWAY and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
IL:BWAYBrainsway 3733.00882.0030.94%
IL:ILXILEX Medical Ltd.4782.00-1485.05-23.70%
IL:ALMDAllmed Solutions Ltd.31.80-0.20-0.62%
IL:EPITEPITOMEE MEDICAL LTD336.30-409.30-54.90%
IL:SOFWSofwave Medical Ltd.3629.00501.0016.02%
IL:PLSMPulsenmore533.40-3475.37-86.69%
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.

Date of analysis: Aug 18, 2026