Education
About Us
Working with TipRanks
Follow Us
Paragon 28 (FNA)
NYSE:FNA
Top Page
Paragon 28
(NYSE:FNA)
64Neutral
Positive Factors
Acquisition
ZBH and FNA announced they entered into a definitive agreement for ZBH to acquire all outstanding shares of FNA in a transaction valued at ~$1.2B.
Product Innovation
The company launched two new products this quarter, enhancing its ankle portfolio, and increased its producing representative count.
Revenue Growth
Paragon 28 reported preliminary Q4/24 revenue of $71.5M-$71.8M, an increase of 18.0-18.5% Y/Y, compared to CG/consensus estimates of $69.6M/$69.6M.
Negative Factors
Analyst Recommendation
Following shares moving to the deal price, the recommendation for shares is downgraded to EW-Vol. from OW-Vol.
Deal Valuation
The premium was considered a bit light, but shares have had a strong run since October.
Market Position
Both companies' market shares are low in the $5B foot & ankle market.
Paragon 28 (FNA) vs. S&P 500 (SPY)
Market Cap
$1.09B
Dividend YieldN/A
Average Volume (3M)1.86M
Price to Earnings (P/E)―
Beta (1Y)1.41
Revenue Growth18.39%
EPS Growth6.08%
CountryUS
Employees574
SectorHealthcare
Sector Strength77
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-0.66
Shares Outstanding83,894,970
10 Day Avg. Volume1,588,086
30 Day Avg. Volume1,864,438
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.26
Price to Cash Flow (P/CF)-83.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.33Price Target Upside17.65% Upside
Rating ConsensusHold
Number of Analyst Covering6
Paragon 28 Business Overview & Revenue Model
Company DescriptionParagon 28, Inc. is a medical device company specializing in the development and distribution of innovative solutions for the foot and ankle orthopedic market. The company is dedicated to improving the lives of patients with foot and ankle conditions by providing a comprehensive portfolio of products, including surgical plates, screws, biologics, and preoperative planning tools. Paragon 28 operates within the healthcare sector, focusing specifically on the orthopedic device industry.
How the Company Makes MoneyParagon 28 generates revenue primarily through the sale of its medical devices and related products to hospitals, surgical centers, and healthcare providers. Key revenue streams include the direct sales of their foot and ankle surgical solutions, which are designed to address a variety of orthopedic conditions. The company may also engage in strategic partnerships or collaborations with healthcare providers and distributors to expand its market reach and enhance its product offerings. Additional revenue can come from service agreements and product support provided to customers. Factors contributing to Paragon 28's earnings include the demand for innovative and effective orthopedic solutions and the company's ability to maintain strong relationships with healthcare professionals and institutions.
Paragon 28 Financial Statement Overview
Summary
Paragon 28 demonstrates strong revenue growth and a solid balance sheet with minimal leverage, but faces significant challenges in profitability and cash flow generation. The company must address operational inefficiencies to improve its financial health and achieve sustainable growth.Income Statement
Paragon 28 shows a consistent increase in revenue over the years, with a revenue growth rate of 18.39% from 2023 to 2024. However, the company has been experiencing declining profitability, as indicated by negative EBIT and net income margins. The gross profit margin remains strong at 74.75% for 2024, showing efficient cost management, but the persistent negative EBIT and net income margins indicate ongoing operational challenges.55
Neutral
Balance Sheet
The company's balance sheet indicates a solid equity base, with a debt-to-equity ratio of 0.005, suggesting low leverage. However, the return on equity is negative due to net losses, and the equity ratio of 44.91% shows a reasonable balance between equity and total assets. While the equity position is stable, the lack of profitability is a concern.60
Neutral
Cash Flow
Paragon 28's cash flow statements reveal challenges in generating positive operating cash flow, with zero operating cash flow in 2024. The free cash flow remains negative, reflecting ongoing investment and financing activities. The absence of positive free cash flow growth indicates difficulties in converting revenue into cash.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 256.18M | 216.39M | 181.38M | 147.46M | 110.98M |
| Gross Profit | ||||
| 191.49M | 164.44M | 148.93M | 119.44M | 85.88M |
| EBIT | ||||
| -40.78M | -45.66M | -35.05M | -10.78M | 5.63M |
| EBITDA | ||||
| -23.40M | -36.61M | -47.86M | -2.30M | 12.01M |
| Net Income Common Stockholders | ||||
| -54.64M | -57.53M | -67.33M | -13.69M | 2.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 34.58M | 75.64M | 38.47M | 109.35M | 17.50M |
| Total Assets | ||||
| 290.72M | 340.70M | 254.11M | 234.54M | 97.58M |
| Total Debt | ||||
| 640.00K | 112.03M | 42.91M | 7.63M | 6.26M |
| Net Debt | ||||
| -33.94M | 36.39M | 4.44M | -101.72M | -11.24M |
| Total Liabilities | ||||
| 160.13M | 162.96M | 113.18M | 42.35M | 26.10M |
| Stockholders Equity | ||||
| 130.59M | 177.74M | 140.93M | 192.19M | 71.48M |
| Cash Flow | Free Cash Flow | |||
| -44.10M | -91.92M | -92.27M | -24.61M | -9.73M |
| Operating Cash Flow | ||||
| -27.15M | -63.89M | -49.18M | -3.32M | 1.11M |
| Investing Cash Flow | ||||
| -15.69M | -26.99M | -60.69M | -35.49M | -10.32M |
| Financing Cash Flow | ||||
| 293.00K | 128.65M | 39.49M | 131.10M | 24.01M |
Paragon 28 Technical Analysis
Positive
13.03
Price Trends
12.42
Positive
10.69
Positive
8.88
Positive
Market Momentum
0.14
Positive
66.38
Neutral
32.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FNA, the sentiment is Positive. The current price of 13.03 is above the 20-day moving average (MA) of 13.02, above the 50-day MA of 12.42, and above the 200-day MA of 8.88, indicating a bullish trend. The MACD of 0.14 indicates Positive momentum. The RSI at 66.38 is Neutral, neither overbought nor oversold. The STOCH value of 32.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FNA.
Paragon 28 Risk Analysis
Paragon 28 disclosed 72 risk factors in its most recent earnings report. Paragon 28 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
Paragon 28 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Performance Comparison
FNA
Paragon 28
13.03
3.21
32.69%
ATEC
Alphatec Holdings
9.54
-4.24
-30.77%
OFIX
Orthofix
16.60
2.54
18.07%
Paragon 28 Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.23% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call for Paragon 28's Q3 2024 highlighted strong financial performance with record revenues, successful product launches, improved adjusted EBITDA, and increased revenue guidance. Despite slight decreases in gross margin and non-recurring severance costs, the company's overall performance and strategic initiatives for sustainable growth and efficiency suggest a positive outlook.Highlights
Record Global Revenue
Global revenue for Q3 2024 reached a record $62.3 million, representing 18.1% reported growth and 17.6% constant currency growth.
Strong U.S. and International Performance
U.S. revenue was $51.2 million with 14.8% growth, and international revenue was $11.2 million with 35.7% reported and 32.8% constant currency growth.
New Product Launches
2024 saw 13 new product launches, including key products like the Phantom Fibula Nail System and a short stem tibia implant, driving significant excitement and adoption.
Improved Adjusted EBITDA
Adjusted EBITDA for Q3 2024 was a profit of $432,000, marking the first full quarter of positive adjusted EBITDA since the company's IPO in October 2021.
Increased Revenue Guidance
Full-year 2024 revenue guidance was increased to $252 million to $256 million, reflecting 16.5% to 18.3% growth.
Significant Free Cash Flow Improvement
Free cash flow improved by 69.5% compared to Q3 2023 and 54.7% sequentially from Q2 2024.
Lowlights
Gross Margin Decrease
Gross margin for Q3 2024 was 74.1%, a 90 basis point decrease from the second quarter of 2024.
Non-Recurring Costs
Q3 2024 included $986,000 of non-recurring severance costs, impacting operating expenses.
Company Guidance
During Paragon 28's Q3 2024 earnings call, the company reported a record global revenue of $62.3 million, marking an 18.1% reported and 17.6% constant currency growth. The U.S. business saw $51.2 million in revenue, with a 14.8% reported growth and a 9% increase in active surgeon customers. International revenue reached $11.2 million, growing by 35.7% reported and 32.8% constant currency. The company achieved an adjusted EBITDA profit of $432,000, marking a significant improvement over the previous year. Operating expenses were reduced to 87.6% of net revenue, a 969 basis point improvement year-over-year. The company also improved its free cash flow by 69.5% compared to the same quarter in 2023. Paragon 28 increased its net revenue guidance for the full year to $252-$256 million, expecting a 16.5% to 18.3% growth. The company remains focused on achieving EBITDA positivity in 2025 and free cash flow positivity in 2026.Paragon 28 Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Paragon 28 Expands Board with New Independent Director
Positive
Dec 11, 2024
Paragon 28 has announced the appointment of Dave Demski as an independent director, expanding its Board of Directors to nine members. Demski brings over two decades of executive leadership experience in the medical device industry, having previously served as President and CEO of Globus Medical. His appointment is expected to bolster Paragon 28’s strategic oversight and governance capabilities, further supporting its mission to advance foot and ankle patient care. This move signals a strengthening of Paragon 28’s position in the orthopedic market, potentially enhancing its innovation and impact on patient lives globally.
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.