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OrthoPediatrics Corp (KIDS)
NASDAQ:KIDS
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OrthoPediatrics
(NASDAQ:KIDS)
65Neutral
Positive Factors
Market Position
New implant product launches are expected to enhance the company's market position.
Revenue Growth
Shares now trade at a compelling valuation with a price target of $37, indicating strong growth potential in a strategic niche unlikely to attract competition.
Negative Factors
Cost Impact
The company is exposed to tariffs which could impact costs and profitability.
Segment Decline
Sports Medicine/Other showed a decline of 29.2% year over year, reflecting a negative trend in this segment.
OrthoPediatrics (KIDS) vs. S&P 500 (SPY)
Market Cap
$571.87M
Dividend YieldN/A
Average Volume (3M)207.08K
Price to Earnings (P/E)―
Beta (1Y)1.06
Revenue Growth37.65%
EPS Growth-77.01%
CountryUS
Employees562
SectorHealthcare
Sector Strength70
IndustryMedical - Devices
Share Statistics
EPS (TTM)-1.64
Shares Outstanding24,831,427
10 Day Avg. Volume201,703
30 Day Avg. Volume207,076
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.96
Price to Cash Flow (P/CF)-38.00
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
$38.43Price Target Upside81.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
OrthoPediatrics Business Overview & Revenue Model
Company DescriptionOrthoPediatrics Corp. (KIDS) is a medical device company focused exclusively on providing a comprehensive range of products for the pediatric orthopedic market. The company designs, develops, and sells innovative orthopedic implants and instruments to address the unique needs of children with musculoskeletal disorders. By collaborating with surgeons, OrthoPediatrics ensures that its products improve surgical outcomes and patient care in pediatric orthopedics.
How the Company Makes MoneyOrthoPediatrics generates revenue primarily through the sale of its specialized orthopedic implants and instruments designed for pediatric use. The company's revenue model is based on direct sales to hospitals, surgical centers, and healthcare providers, as well as through distribution partnerships in various regions. Key revenue streams include its core product lines, such as trauma and deformity correction systems, scoliosis treatment systems, and sports medicine solutions. The company also benefits from strong relationships with pediatric orthopedic surgeons, who provide insights and feedback to guide product development, ensuring that its offerings meet the specific needs of young patients. Additionally, OrthoPediatrics may engage in strategic partnerships and collaborations to expand its market reach and enhance its product portfolio, contributing to its overall earnings.
OrthoPediatrics Financial Statement Overview
Summary
OrthoPediatrics shows strong revenue growth and a robust equity position, with low debt levels. However, the company struggles with profitability and cash flow management, marked by negative net income and free cash flows. While the growth trajectory is promising, operational inefficiencies and cash flow reliance on external financing present risks that need addressing for sustainable financial health.Income Statement
OrthoPediatrics has demonstrated consistent revenue growth, with a TTM revenue increase of 37.6% compared to the previous year. Despite this, the company is facing profitability challenges, evidenced by negative net profit margins and EBIT margins. The gross profit margin is relatively strong at 67.8%, indicating effective cost management relative to revenue. However, both the EBIT and EBITDA margins are negative, reflecting operational inefficiencies and high operating expenses.62
Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 74.9%, suggesting financial stability. The debt-to-equity ratio is low at 0.07, which indicates a conservative approach to leverage. However, the return on equity is negative due to consistent net losses, which is a concern for long-term value creation. Overall, the balance sheet exhibits strong equity and low debt, but profitability remains a challenge.70
Positive
Cash Flow
OrthoPediatrics faces negative free cash flow, although it has improved from the previous year. The operating cash flow to net income ratio is unfavorable, reflecting cash flow struggles in relation to losses. The company is heavily investing in capital expenditures, which could drive future growth but currently contributes to cash flow challenges. Financing cash flow remains positive, indicating reliance on external funding.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 204.73M | 148.73M | 122.29M | 98.05M | 71.08M | Gross Profit |
| 148.60M | 111.25M | 90.66M | 73.40M | 55.03M | EBIT |
| -29.52M | -25.77M | -21.79M | -17.87M | -20.41M | EBITDA |
| -10.44M | -8.38M | -7.93M | -7.19M | -22.35M | Net Income Common Stockholders |
| -37.82M | -20.97M | 1.26M | -16.26M | -32.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 68.83M | 80.31M | 118.29M | 53.54M | 83.90M | Total Assets |
| 473.21M | 438.75M | 427.73M | 304.27M | 320.41M | Total Debt |
| 24.12M | 10.06M | 907.00K | 1.04M | 1.50M | Net Debt |
| -19.70M | -21.00M | -8.08M | -6.60M | -27.26M | Total Liabilities |
| 118.64M | 61.72M | 49.08M | 78.91M | 85.64M | Stockholders Equity |
| 354.57M | 377.02M | 378.65M | 225.37M | 234.77M |
| Cash Flow | Free Cash Flow | |||
| -41.31M | -46.03M | -31.80M | -29.07M | -29.83M | Operating Cash Flow |
| -27.05M | -27.05M | -21.77M | -13.06M | -18.53M | Investing Cash Flow |
| -13.16M | 41.68M | -113.37M | -7.41M | -69.69M | Financing Cash Flow |
| 53.13M | 7.30M | 135.97M | 6.00K | 46.73M |
OrthoPediatrics Technical Analysis
Negative
21.16
Price Trends
24.26
Negative
24.27
Negative
26.60
Negative
Market Momentum
0.10
Positive
53.00
Neutral
39.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KIDS, the sentiment is Negative. The current price of 21.16 is below the 20-day moving average (MA) of 24.26, below the 50-day MA of 24.26, and below the 200-day MA of 26.60, indicating a bearish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 53.00 is Neutral, neither overbought nor oversold. The STOCH value of 39.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KIDS.
OrthoPediatrics Risk Analysis
OrthoPediatrics disclosed 78 risk factors in its most recent earnings report. OrthoPediatrics reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
OrthoPediatrics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $571.87M | ― | -10.34% | ― | 37.65% | -77.01% | |
60 Neutral | $562.50M | ― | -18.38% | ― | 20.37% | 34.10% | |
53 Neutral | $466.02M | ― | -44.45% | ― | 11.89% | -10.22% | |
52 Neutral | $620.31M | ― | -20.86% | ― | 11.89% | 79.18% | |
51 Neutral | $574.41M | ― | -22.87% | ― | 7.08% | 20.45% | |
48 Neutral | $6.25B | 1.14 | -46.26% | 2.69% | 19.24% | 1.75% | |
46 Neutral | $689.75M | ― | 26.25% | ― | ― | ― |
* Healthcare Sector Average
Performance Comparison
KIDS
OrthoPediatrics
21.16
-9.93
-31.94%
OFIX
Orthofix
13.67
0.35
2.63%
SIBN
SI-Bone
13.37
-1.60
-10.69%
BVS
Bioventus
7.48
2.91
63.68%
TMCI
Treace Medical Concepts
6.74
-5.14
-43.27%
CBLL
Ceribell, Inc.
15.00
-10.50
-41.18%
OrthoPediatrics Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -7.56% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
OrthoPediatrics reported strong growth and record patient impact for 2024, with significant revenue and adjusted EBITDA improvements. Despite challenges with international sales and gross margin declines due to expense reclassifications, the company remains on track with positive growth projections, successful integration efforts, and new product launches. The restructuring efforts and strategic decisions are aimed at driving long-term profitability.Highlights
Record-High Patient Impact
In 2024, OrthoPediatrics helped over 138,000 kids, a record high for the company, marking significant growth in patient impact.
Revenue and Growth Metrics
Total revenue for Q4 2024 was $52.7 million, representing a 40% growth from the comparable period. The full-year revenue expectation for 2025 is between $235 to $242 million, an annual growth of 15% to 18%.
Significant Growth in Key Segments
TMD and scoliosis segments saw quarterly growth of 35% and 62%, respectively. The scoliosis global revenue increased by 62% compared to the prior year.
Adjusted EBITDA Improvement
Adjusted EBITDA more than doubled in Q4 2024 to $3.0 million, with an expectation of $15 to $17 million in adjusted EBITDA for 2025.
Positive Free Cash Flow Projection
The company expects to achieve its first quarter of positive free cash flow by Q4 2025.
Expansion and Integration Success
Successful integration of Boston OMP and expansion of the OPSB business, with plans for four new territories in 2025.
Strong International Demand
Despite challenges, EMEA T&D growth was strong due to high demand, and non-LATAM T&D growth exceeded 20% with scoliosis growing nearly 30%.
New Product Launches and R&D Advancements
Launches included PMP Tibia and DF2 femur fracture brace, with plans for a beta launch of the 3P hip system and new EOS products.
Lowlights
Slower International Sales
International revenue growth was only 5% due to conscious decision to limit set sales shipments to South America, particularly Brazil, affected by currency fluctuations.
Gross Margin Decline
Q4 2024 gross profit margin was 68%, down from 71% in the prior year, primarily due to reclassification of expenses in OPSB.
One-Time Charges and Restructuring
A $3.7 million restructuring charge was incurred due to the closure of the OP Israel office and production move to the US.
Flat Guidance for Gross Margins
Updated gross margin guidance remains flat at 72% to 73%, reflecting cost reclassifications and not impacting profitability.
Company Guidance
During the fourth quarter of 2024, OrthoPediatrics achieved a total revenue of $52.7 million, marking a 40% increase from the previous year, with U.S. revenue seeing a 52% rise to $42.9 million. The company's trauma and deformity business reported revenue of $36.4 million, a 35% increase, while the scoliosis segment grew by 62% to $15.6 million. International sales reached $9.8 million, reflecting a 5% growth, despite deliberate reductions in shipments to South America. The company deployed $3.7 million in sets during the quarter, slightly down from the previous year, and saw its adjusted EBITDA more than double to $3 million. Looking ahead, OrthoPediatrics anticipates full-year 2025 revenue to range from $235 to $242 million, with adjusted EBITDA projected between $15 to $17 million, and expects to achieve its first quarter of positive free cash flow by the fourth quarter of 2025.OrthoPediatrics Corporate Events
Business Operations and Strategy
OrthoPediatrics Highlights Growth Strategy in Presentations
Positive
Jan 14, 2025
OrthoPediatrics announced upcoming presentations by its executive officers to investors and analysts, highlighting the company’s focus on pediatric orthopedic solutions. The announcement underscores OrthoPediatrics’ strategy to expand its market through aggressive R&D investments, strategic acquisitions, and its commitment to clinical education, which positions it as a leader in the pediatric orthopedic industry. This initiative aims to strengthen the company’s operations and further its reach in the global market.
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.