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Nephros (NEPH) AI Stock Analysis

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NEPH

Nephros

(NASDAQ:NEPH)

Select Model
Rating:62Neutral
Price Target:$3.50▲(14.01% Upside)
Action:reiterated
Date:11/07/26

The score is primarily supported by improved profitability and a conservatively financed balance sheet, plus a notably upbeat earnings call highlighting growth and customer-base expansion. These are tempered by negative TTM free cash flow (weak cash conversion) and poor technicals (below key moving averages with negative MACD), while valuation appears reasonable but not especially discounted.

Positive Factors
Recurring Customer BaseThe record active-site base supports repeat replacement-filter demand after installation, creating a more durable revenue foundation than one-time equipment sales. Continued reorders and customer retention can improve revenue visibility while expanding relationships across healthcare and other institutional markets.
Negative Factors
Negative Cash ConversionNegative operating and free cash flow despite positive earnings indicates that recent profitability is not currently translating into cash generation. Persistent weak conversion could increase reliance on working-capital movements or existing liquidity and constrain internally funded growth.

Nephros (NEPH) vs. SPDR S&P 500 ETF (SPY)

-40%-30%-20%-10%0%10%20%30%40%NEPH-30.23%SPY+14.28%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
$33.37M
Dividend Yield
―
Average Volume (3M)
43.86K
Price to Earnings (P/E)
17.2
Beta (1Y)
-0.16
Revenue Growth
20.36%
EPS Growth
26.09%
Country
US
Employees
36
Sector
Healthcare
Sector Strength
51
Industry
Medical - Instruments & Supplies

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 segment...

How the Company Makes Money

Nephros makes money primarily by selling filtration products and related consumables used to treat water at the point of use. A significant portion of its revenue is typically generated from recurring replacement-filter demand, because installed filt...

Nephros Earnings Call Summary

Earnings Call Date:Nov 05, 2026(Q3-2026)|% Change Since:-0.65%|Next Earnings Date:Mar 11, 2027
Earnings Call SentimentPositive

The call was strongly positive overall. Nephros reported double-digit revenue growth, higher net income and adjusted EBITDA, a record active customer base, continued programmatic and service expansion, broader market applications, and a debt-free balance sheet. These strengths were partly offset by lower gross margins, higher product and operating costs, volatility in emergency response revenue, long commercial sales cycles, and still-developing education ROI metrics.

Positive Updates

Strong Third-Quarter Revenue Growth
Third-quarter revenue was approximately $5.6 million, up 18% from approximately $4.8 million in the third quarter of 2025. Management described the quarter as another strong quarter following the record $6 million reported in the second quarter.

Negative Updates

Third-Quarter Gross Margin Decline
Third-quarter gross margin decreased to approximately 58% from 61% in the prior-year period, a decline of approximately 3 percentage points. Management attributed the decrease primarily to higher inventory, shipping, and handling costs, including tariff expense, and the continued growth of service revenue, which currently carries a lower gross margin than product sales.

Company Guidance

Management’s objective for the remainder of 2026 is simple: “finish strong,” entering 2027 with “a large recurring revenue base, deeper customer relationship, and broader market opportunities and infrastructure necessary to support this stage of Nephros’ growth.” Priorities are to take exceptional care of existing customers, expand the installed base, grow programmatic and service revenue, strengthen the educational platform, improve underlying margins, introduce differentiated products, and find new applications and markets; management also expects to continue investing in education as a driver of market development and commercial growth, with 1,766 active customer sites, year-to-date revenue of approximately $16.9 million, revenue growth of 20%, and core programmatic revenue growth of 19% as the current base.

Nephros Financial Statement Overview

Summary

Profitability and balance sheet strength are clear positives (improving net income, solid gross margin, very low leverage), but the latest TTM cash flow is the major drag: operating cash flow and free cash flow are negative despite positive earnings, raising cash-conversion and earnings-quality risk.

Income Statement

78Positive

Balance Sheet

86Very Positive

Cash Flow

42Neutral
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue21.58M18.79M14.16M14.24M9.97M10.22M
Gross Profit12.87M11.48M8.72M8.40M4.73M5.63M
EBITDA1.98M1.35M227.00K-1.36M-3.91M-2.49M
Net Income1.91M1.19M74.00K-1.57M-7.38M-4.11M
Balance Sheet
Total Assets15.30M13.64M11.21M11.86M11.00M17.65M
Cash, Cash Equivalents and Short-Term Investments4.55M5.40M3.76M4.31M3.63M6.97M
Total Debt774.00K1.06M1.41M1.84M1.09M1.00M
Total Liabilities2.76M3.44M2.63M3.50M2.12M2.90M
Stockholders Equity12.55M10.20M8.59M8.36M5.59M11.70M
Cash Flow
Free Cash Flow-910.00K1.65M-547.00K752.00K-3.37M-1.45M
Operating Cash Flow-910.00K1.65M-492.00K827.00K-3.23M-1.42M
Investing Cash Flow00-50.00K-75.00K-137.00K-85.00K
Financing Cash Flow285.00K-5,000-5,000-79.00K34.00K237.00K

Nephros Technical Analysis

Technical Analysis SentimentNegative
Last Price3.07

Price Trends

50DMA3.72Negative
100DMA3.77Negative
200DMA3.61Negative

Market Momentum

MACD-0.18Positive
RSI40.83Neutral
STOCH45.00Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEPH, the sentiment is Negative. The current price of 3.07 is below the 20-day moving average (MA) of 3.33, below the 50-day MA of 3.72, and below the 200-day MA of 3.61, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 40.83 is Neutral, neither overbought nor oversold. The STOCH value of 45.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

1 New Risk
1.We rely on information technology systems and network infrastructure to operate and manage our business. If we experience a breach, cyber attack or other disruption to these systems or data, our business, results of operations and financial condition could be adversely affected.Q4, 2023

Nephros Peers Comparison

Overall Rating

UnderperformOutperform
Sector (51)

Financial Indicators

NEPH against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
NEPHNEPH62Neutral$34.24M17.1616.83%―20.36%26.09%
HBIOHBIO52Neutral$42.15M-3.68-130.06%―2.34%78.52%
Sector *51Neutral$7.86B-0.30-43.30%2.27%22.53%-2.21%
MLSSMLSS50Neutral$26.46M-6.49-149.08%―3.72%43.78%
FEMYFEMY45Neutral$11.98M-0.33-225.98%―21.86%73.27%
RVPRVP44Neutral$16.59M-4.61-4.59%―-11.16%59.85%

* Healthcare Sector Average

Performance Comparison

-50%0%50%NEPHHBIORVPMLSSFEMYDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
NEPH and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
NEPHNephros, Inc.3.07-1.35-30.54%
HBIOHarvard Bioscience9.683.8666.27%
RVPRetractable Technologies0.55-0.26-31.60%
MLSSMilestone Scientific Inc0.31-0.07-18.47%
FEMYFemasys, Inc.1.50-15.03-90.93%

Nephros Corporate Events

Regulatory Filings and ComplianceShareholder Meetings

Nephros Sets Key Deadlines for 2026 Annual Meeting

Neutral
Oct 13, 2026

Nephros, Inc. has scheduled its 2026 Annual Meeting of Stockholders for November 25, 2026, at 11:00 a.m. Eastern, to be conducted virtually via live webcast. The Board set September 30, 2026, as the record date for shareholders entitled to receive no...

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: Nov 07, 2026