Irhythm Technologies (IRTC) AI Stock Analysis

• Market Cap: $3.20B
• Dividend Yield: N/A
• Average Volume (3M): 476.04K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.12
• Revenue Growth: 20.13%
• EPS Growth: 10.05%
• Country: US
• Employees: 2,000
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical Equipment & Supplies
• EPS (TTM): -3.64
• Shares Outstanding: 31,409,616
• 10 Day Avg. Volume: 560,711
• 30 Day Avg. Volume: 476,040
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.40
• Price to Cash Flow (P/CF): 41.50
• P/FCF Ratio: 64.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $130.27
• Price Target Upside: 28.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

iRhythm Technologies shows strong revenue growth and positive technical indicators, suggesting a bullish outlook. However, financial stability concerns, negative profitability, and high valuation limit the overall attractiveness of the stock. The favorable earnings call provides a positive outlook, but ongoing regulatory challenges and pricing pressures remain risks. Overall, the stock is moderately attractive with potential for growth, tempered by financial and valuation concerns.

Positive Factors

Financial Performance

Irhythm Technologies posted strong quarterly financial results, surpassing both earnings and revenue expectations, which supports a positive outlook for the stock.

Market Expansion

Management remains focused on expanding its total addressable market from 6.5M ACMs to 27M patients presenting to their primary care physicians or unaware of an arrhythmia.

Negative Factors

Regulatory Challenges

There is some uncertainty around regulatory remediation efforts, which could impact growth, with 2025 possibly being a year of growth deceleration before re-acceleration in 2026.

Irhythm Technologies Business Overview & Revenue Model

Company Description

iRhythm Technologies, Inc. is a healthcare technology company that specializes in the development of innovative solutions for cardiac care. The company operates primarily in the digital health sector and is known for its flagship product, the Zio service, which is a comprehensive platform for monitoring and diagnosing cardiac arrhythmias. iRhythm's cutting-edge technology combines wearable biosensor devices with powerful data analytics to provide healthcare providers with actionable insights, enabling more accurate diagnosis and improved patient outcomes.

How the Company Makes Money

iRhythm Technologies generates revenue through the sale and reimbursement of its Zio service, which includes wearable devices and data analytics services. The company primarily earns money by billing healthcare providers, hospitals, and insurance companies for the use of its Zio monitors and the subsequent analysis of the data collected. Revenue is largely driven by the volume of Zio monitors prescribed and the number of analyses performed. iRhythm has established partnerships with various health systems and insurance companies, which are instrumental in facilitating the adoption and reimbursement of its services. The company's business model relies heavily on the successful integration of its technology into clinical workflows and securing coverage agreements with payers to ensure steady demand and reimbursement for its diagnostic services.

Irhythm Technologies Financial Statement Overview

Summary

iRhythm Technologies exhibits strong revenue growth but struggles with profitability and financial stability. High leverage and negative equity trends highlight balance sheet vulnerabilities. The company shows some improvement in cash flow management but faces challenges in maintaining sustainable cash generation. Overall, while the company is growing its top line, operational efficiency and financial stability need significant improvement to enhance its financial health.

Income Statement

The company has shown consistent revenue growth over the years, with a notable increase from 2023 to 2024. However, profitability is a significant concern as the company has consistently posted net losses. The net profit margin remains negative, and the EBIT and EBITDA margins highlight ongoing operational challenges. The gross profit margin is relatively stable, indicating the ability to maintain cost of goods sold, but overall profitability needs improvement.

Balance Sheet

The company's debt-to-equity ratio has increased significantly, reflecting higher leverage, which poses a risk in times of financial instability. The equity ratio is declining, indicating reduced shareholder equity relative to total assets. Return on equity remains negative due to ongoing net losses. Although the company holds a substantial amount of cash and short-term investments, the overall balance sheet health is weakened by high liabilities and low equity.

Cash Flow

The company has managed to improve its free cash flow from 2023 to 2024, moving from negative to positive territory, indicating better cash management. However, overall free cash flow remains weak compared to net income, and the operating cash flow to net income ratio indicates challenges in converting sales into cash. Despite improved financing activities, the cash flow stability remains a concern due to high operating and investing cash outflows.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
591.84M	492.68M	410.92M	322.82M	265.17M
	Gross Profit
407.53M	331.81M	281.63M	213.57M	194.89M
	EBIT
-115.50M	-125.16M	-87.18M	-99.94M	-43.67M
	EBITDA
-74.13M	-96.86M	-92.14M	-83.23M	-29.15M
	Net Income Common Stockholders
-113.29M	-123.41M	-116.16M	-101.36M	-43.83M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
535.55M	133.76M	213.14M	239.13M	335.22M
	Total Assets
931.45M	433.14M	448.22M	462.97M	511.74M
	Total Debt
736.91M	129.82M	131.04M	117.71M	122.47M
	Net Debt
317.31M	93.65M	52.21M	-9.85M	33.84M
	Total Liabilities
840.54M	223.05M	208.41M	183.45M	170.13M
	Stockholders Equity
90.91M	210.10M	239.81M	279.51M	341.61M
Cash Flow		Free Cash Flow
3.39M	-90.53M	-52.84M	-65.82M	-27.31M
	Operating Cash Flow
3.39M	-50.10M	-23.01M	-37.75M	-13.76M
	Investing Cash Flow
-122.98M	-1.21M	-52.43M	105.26M	-132.39M
	Financing Cash Flow
511.38M	8.82M	26.72M	-28.58M	214.32M

Irhythm Technologies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 101.75
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRTC, the sentiment is Neutral. The current price of 101.75 is below the 20-day moving average (MA) of 110.28, below the 50-day MA of 104.72, and above the 200-day MA of 87.36, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 39.23 is Neutral, neither overbought nor oversold. The STOCH value of 12.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IRTC.

Irhythm Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PODD	76 Outperform	$17.68B	43.50	43.03%	―	22.07%	101.95%
CDNA	68 Neutral	$1.05B	18.60	19.46%	―	19.07%	―
DXCM	66 Neutral	$30.42B	54.64	27.63%	―	11.34%	4.24%
IRTC	61 Neutral	$3.20B	―	-75.27%	―	20.13%	10.05%
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%
QDEL	46 Neutral	$2.75B	―	-50.74%	―	-7.03%	-20233.78%
BFLY	46 Neutral	$692.33M	―	-37.28%	―	24.51%	47.32%

Irhythm Technologies Corporate Events

iRhythm Technologies Board Member Steps Down for New Role

On January 23, 2025, iRhythm Technologies announced that Mojdeh Poul will not seek re-election to its Board of Directors following her recent appointment as President and CEO of Integra LifeSciences Holdings Corporation. Poul’s decision is not due to any disagreement with iRhythm, and this change is part of her transition to her new leadership role, which may influence iRhythm’s future board dynamics.

iRhythm Technologies Reports Strong Growth and Innovation

iRhythm Technologies announced its preliminary fourth quarter 2024 highlights and business updates at the J.P. Morgan Healthcare Conference, indicating a strong year with revenues expected to exceed their guidance. The company achieved record account openings and expanded globally, securing FDA clearance for Zio device advancements, and initiated manufacturing automation, reflecting a commitment to growth and innovation. Looking forward, iRhythm plans to enhance its quality systems and further penetrate both domestic and international markets, focusing on sustainable value creation for stakeholders.