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SurModics Inc (SRDX)
:SRDX
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SurModics
(NASDAQ:SRDX)
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Rating:43Neutral
Price Target:
$32.00
▲(13.76% Upside)
SurModics is currently facing substantial financial and market challenges. The most significant factors affecting the score are the company's declining revenues and profitability issues, coupled with bearish technical indicators. The negative valuation metrics further underscore the need for strategic improvements to enhance financial health and investor confidence.
Positive Factors
Strong Gross Profit Margin
A strong gross profit margin indicates efficient cost management and pricing power, which can support long-term profitability as the company navigates financial challenges.
Conservative Leverage Position
A low debt-to-equity ratio reflects a conservative leverage position, providing financial flexibility and reducing risk during economic downturns.
Diversified Revenue Model
A diversified revenue model with multiple streams such as product sales, royalties, and contract services enhances financial stability and growth potential, mitigating risks from market fluctuations.
Negative Factors
Declining Revenue
Significant revenue decline indicates challenges in maintaining sales momentum, which can impact long-term growth prospects and market competitiveness.
Negative Profitability
Negative profitability reflects operational inefficiencies and challenges in cost management, which can hinder the company's ability to reinvest in growth and innovation.
Cash Flow Challenges
Declining free cash flow signals potential liquidity issues, limiting the company's ability to finance operations and invest in strategic initiatives, affecting long-term sustainability.
SurModics (SRDX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$392.26M
Dividend YieldN/A
Average Volume (3M)109.57K
Price to Earnings (P/E)―
Beta (1Y)0.69
Revenue Growth-0.02%
EPS Growth-1196.44%
CountryUS
Employees389
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.06
Shares Outstanding14,297,623
10 Day Avg. Volume77,407
30 Day Avg. Volume109,568
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.51
Enterprise Value/Gross Profit4.80
Enterprise Value/Ebitda-51.54
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering2
SurModics Business Overview & Revenue Model
Company DescriptionSurModics, Inc. (SRDX) is a leading provider of medical device and in vitro diagnostic technologies, primarily serving the healthcare industry. The company specializes in developing innovative coating technologies, drug delivery systems, and biomaterials, which are used in various applications such as cardiovascular, ophthalmology, and other specialty markets. SurModics focuses on enhancing the performance and safety of medical devices through its advanced product offerings and services, aimed at improving patient outcomes.
How the Company Makes MoneySurModics generates revenue through a diversified model that includes product sales, royalties, and contract services. Key revenue streams consist of sales from its proprietary coating and drug delivery technologies, which are used by medical device manufacturers, as well as collaborations with partners for product development. The company also earns revenue from licensing agreements associated with its intellectual property. Significant partnerships with major medical device companies further contribute to its earnings, as they often involve development contracts and milestone payments, which enhance SurModics' financial stability and growth potential.
SurModics Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2024)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and profitability improvements, driven by the Medical Device segment and successful product launches. However, challenges remain in the IVD segment and product gross margins. The sentiment is positive due to the significant achievements outweighing the challenges.Q2-2024 Updates
Positive Updates
Strong Revenue Growth
Total revenue increased by 18% year-over-year to $32 million, with a significant contribution from the Medical Device segment, which grew by 26% to $24.8 million.
Medical Device Segment Success
Product sales in the Medical Device segment increased by 40% year-over-year, driven by the Vascular Interventions portfolio, including SurVeil DCB, Pounce thrombectomy, and Sublime radial access products.
Profitability Improvements
Achieved an $8 million improvement from a GAAP net loss to GAAP net income and a $6.3 million increase in adjusted EBITDA.
Successful Product Launches
Completed limited market evaluations and launched Pounce venous and Pounce low profile thrombectomy systems.
Positive Cash Flow
Generated $7.4 million in cash flow from operations, driven by royalty catch-up payments and a $3.4 million cash tax refund.
Negative Updates
Decline in IVD Segment
Revenue from the in Vitro Diagnostics segment decreased by 5% to $7.1 million, primarily due to lower sales of substrate products.
Product Gross Margin Challenges
Product gross margin decreased to 60.8% from 62.6% in the prior year, affected by under absorption and production inefficiencies.
R&D Expenses Reduction
R&D expense decreased by 21% to $10.2 million, reflecting lower costs related to SurVeil DCB and timing of thrombectomy devices development.
Company Guidance
During Surmodics' second quarter fiscal year 2024 earnings call, the company reported strong financial performance and updated its guidance for the year. Total revenue for the quarter grew by 18% year-over-year to $32 million, with a notable 26% increase in the Medical Device segment to $24.8 million. Excluding the SurVeil drug-coated balloon license fee, revenue grew by 19%. The company achieved an $8 million improvement from a GAAP net loss to GAAP net income and a $6.3 million rise in adjusted EBITDA. Surmodics' cash flow from operations reached $7.4 million, bolstered by $1.4 million in royalty catch-up payments and a $3.4 million cash tax refund. For fiscal 2024, Surmodics raised its revenue guidance to $122-$124 million, indicating a 15%-17% increase excluding SurVeil license fees, and improved its non-GAAP loss per share outlook to a range of $0.67-$0.47. The company attributed its success to robust sales of its Vascular Interventions portfolio, including SurVeil, Pounce thrombectomy, and Sublime radial access products, and highlighted ongoing operational progress towards strategic objectives, such as launching new products and advancing clinical evaluations.SurModics Financial Statement Overview
Summary
SurModics is facing significant financial challenges with declining revenues and negative profitability. Despite a strong gross profit margin and conservative leverage, the negative net income and cash flow issues highlight the need for strategic improvements.Income Statement
SurModics has faced declining revenues with a negative growth rate of -63.7% in TTM, indicating significant challenges in maintaining sales momentum. The gross profit margin remains strong at 73.1%, but the net profit margin is negative at -14.6%, reflecting ongoing profitability issues. EBIT and EBITDA margins are also negative, suggesting operational inefficiencies.45
Neutral
Balance Sheet
The company's debt-to-equity ratio is relatively low at 0.29, indicating a conservative leverage position. However, the return on equity is negative at -15.6%, highlighting challenges in generating returns for shareholders. The equity ratio stands at 65.5%, showing a solid equity base relative to total assets.55
Neutral
Cash Flow
SurModics has experienced a significant decline in free cash flow, with a growth rate of -52.4% in TTM. The operating cash flow to net income ratio is negative, indicating cash flow challenges. However, the free cash flow to net income ratio is positive at 1.88, suggesting some ability to generate cash relative to net losses.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 120.80M | 126.08M | 132.58M | 99.95M | 105.14M | 94.86M |
| Gross Profit | 88.30M | 93.05M | 61.02M | 29.00M | 41.23M | 29.36M |
| EBITDA | -8.23M | 4.73M | 15.15M | -12.22M | 14.67M | 5.94M |
| Net Income | -17.63M | -11.54M | -1.54M | -27.27M | 4.24M | 1.12M |
Balance Sheet | ||||||
| Total Assets | 169.82M | 178.56M | 185.73M | 158.36M | 194.59M | 168.76M |
| Cash, Cash Equivalents and Short-Term Investments | 32.73M | 40.11M | 45.35M | 19.00M | 38.87M | 61.10M |
| Total Debt | 32.58M | 33.24M | 33.25M | 14.81M | 13.71M | 3.78M |
| Total Liabilities | 58.51M | 59.66M | 65.82M | 49.97M | 54.51M | 37.71M |
| Stockholders Equity | 111.31M | 118.90M | 119.91M | 108.39M | 140.09M | 131.06M |
Cash Flow | ||||||
| Free Cash Flow | -3.55M | -3.24M | 7.60M | -20.59M | 9.11M | 10.34M |
| Operating Cash Flow | -1.88M | 248.00K | 10.51M | -17.22M | 15.39M | 14.01M |
| Investing Cash Flow | 5.94M | -2.94M | -6.82M | 6.23M | -25.24M | -9.07M |
| Financing Cash Flow | -2.75M | -2.95M | 18.41M | -375.00K | 10.23M | -4.65M |
SurModics Technical Analysis
Negative
28.13
Price Trends
30.57
Negative
31.62
Negative
31.23
Negative
Market Momentum
-0.93
Negative
34.22
Neutral
23.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRDX, the sentiment is Negative. The current price of 28.13 is above the 20-day moving average (MA) of 27.93, below the 50-day MA of 30.57, and below the 200-day MA of 31.23, indicating a bearish trend. The MACD of -0.93 indicates Negative momentum. The RSI at 34.22 is Neutral, neither overbought nor oversold. The STOCH value of 23.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SRDX.
SurModics Risk Analysis
SurModics disclosed 42 risk factors in its most recent earnings report. SurModics reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SurModics Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $518.43M | 10.90 | 16.04% | ― | -30.39% | 46.15% | |
| ― | $417.97M | ― | ― | ― | ― | ― | |
| ― | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
| ― | $496.17M | ― | -1.67% | ― | -0.85% | 61.31% | |
| ― | $403.68M | ― | -46.89% | ― | 7.67% | 23.79% | |
| ― | $422.30M | -8.61 | -12.67% | ― | 19.90% | -57.90% | |
| ― | $392.26M | -22.18 | -15.36% | ― | -0.02% | -1196.44% |
* Healthcare Sector Average
SRDX
SurModics
27.44
-10.13
-26.96%
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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.