Precipio (PRPO) AI Stock Analysis

• Market Cap: $10.12M
• Dividend Yield: N/A
• Average Volume (3M): 13.15K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.50
• Revenue Growth: 21.95%
• EPS Growth: 39.43%
• Country: US
• Employees: 54
• Sector: Healthcare
• Sector Strength: 65
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -2.96
• Shares Outstanding: 1,504,312
• 10 Day Avg. Volume: 28,158
• 30 Day Avg. Volume: 13,151
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.58
• Price to Cash Flow (P/CF): 25.10
• P/FCF Ratio: 0.00
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Precipio is on a growth trajectory with promising revenue gains and improvements in cash flow, yet faces challenges with profitability and financial stability. The technical indicators suggest cautious optimism, but valuation remains a concern with a negative P/E ratio and no dividend. The earnings call provided a positive outlook with strategic goals, but highlighted hurdles in the products division. Overall, the stock's score reflects a company in transition, with potential growth tempered by financial and operational risks.

Precipio Business Overview & Revenue Model

Company Description

Precipio, Inc. is a healthcare solutions company focused on cancer diagnostics. It operates within the biotechnology and healthcare sectors, offering a range of diagnostic products and services designed to improve the accuracy and efficiency of cancer diagnosis. The company's core products include specialty diagnostic tests that target hematologic cancers and solid tumors, providing advanced insights to healthcare providers and laboratories.

How the Company Makes Money

Precipio makes money primarily through the sale of its proprietary diagnostic tests and services to clinical laboratories, hospitals, and other healthcare providers. The company generates revenue by charging fees for the administration and analysis of its cancer diagnostic tests. It also earns income through strategic partnerships and collaborations with other healthcare organizations, which may include co-development agreements or licensing of its technologies. Additionally, Precipio benefits from its own laboratory services, where it processes tests and provides diagnostic results to its clients. These revenue streams contribute to the company's financial performance by leveraging its innovative diagnostic solutions in the growing field of precision medicine.

Precipio Financial Statement Overview

Summary

Precipio shows strong revenue growth and improvement in gross profit margin. However, persistent negative net profit margins, weak balance sheet with zero equity, and cash flow inefficiencies highlight significant financial challenges.

Income Statement

Precipio has demonstrated a consistent increase in total revenue, growing from $3.13M in 2019 to $15.97M in 2024, indicating a strong upward trajectory in sales. The gross profit margin has improved over time, reaching approximately 47.34% in 2024, up from 7.01% in 2019. However, the company continues to face challenges with negative net profit margins, reflecting ongoing net losses. EBIT and EBITDA margins are also negative, stressing the need for improved cost management and operational efficiency.

Balance Sheet

The company's balance sheet shows significant weaknesses, particularly with zero stockholders' equity in 2024, indicating high financial risk. Although total liabilities have been reduced to zero in 2024, the absence of equity suggests a lack of financial stability. The historical debt-to-equity ratio is concerning, as is the diminished equity ratio over the years. The lack of equity raises concerns about the company's ability to secure financing and sustain operations.

Cash Flow

Precipio has shown some improvement in cash flow, with free cash flow turning positive in 2024 at $216K after being negative in previous years. Operating cash flow improved significantly from -$3.56M in 2023 to $439K in 2024. However, the operating cash flow to net income ratio indicates inefficiencies, as net income remains negative. The company must focus on enhancing cash generation capabilities to ensure long-term sustainability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
16.80M	15.96M	15.20M	9.41M	8.85M	6.09M
	Gross Profit
6.26M	7.56M	6.02M	2.51M	2.39M	1.15M
	EBIT
-4.73M	-4.22M	-7.62M	-12.80M	-9.61M	-9.15M
	EBITDA
-1.85M	-4.22M	-4.32M	-10.65M	-7.05M	-8.77M
	Net Income Common Stockholders
-3.00M	-4.29M	-5.85M	-12.20M	-8.55M	-12.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.90M	3.45M	1.50M	3.44M	11.67M	2.66M
	Total Assets
16.22M	3.45M	18.10M	21.50M	30.44M	20.71M
	Total Debt
4.46M	0.00	1.12M	1.39M	1.43M	1.49M
	Net Debt
-1.44M	-3.45M	-386.00K	-2.05M	-10.24M	-1.17M
	Total Liabilities
5.07M	0.00	3.67M	5.14M	5.83M	6.55M
	Stockholders Equity
11.15M	0.00	14.43M	16.30M	24.56M	14.13M
Cash Flow		Free Cash Flow
-240.00K	216.00K	-3.69M	-8.00M	-7.26M	-7.58M
	Operating Cash Flow
-12.00K	439.00K	-3.56M	-7.72M	-6.58M	-7.43M
	Investing Cash Flow
-228.00K	-223.00K	-126.00K	-277.00K	-682.00K	-96.00K
	Financing Cash Flow
-269.00K	-329.00K	1.74M	-225.00K	16.27M	9.34M

Precipio Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRPO, the sentiment is Positive. The current price of 6.73 is above the 20-day moving average (MA) of 5.74, below the 50-day MA of 6.78, and above the 200-day MA of 6.22, indicating a bullish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 64.22 is Neutral, neither overbought nor oversold. The STOCH value of 62.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRPO.

Precipio Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KPRX	56 Neutral	$9.60M	4.53	22.56%	―	―	―
Sector *	51 Neutral	$5.31B	3.33	-39.82%	2.92%	17.95%	1.84%
PRPO	48 Neutral	$10.12M	―	-32.35%	―	21.95%	39.43%
NURO	44 Neutral	$9.01M	―	-45.38%	―	-48.61%	32.18%
LYRA	42 Neutral	$6.53M	―	-184.99%	―	-1.54%	-7.20%
ACXP	39 Underperform	$9.00M	―	-534.03%	―	―	23.65%

Precipio Corporate Events

Precipio Adopts Performance-Based Stock Options for 2025

On January 16, 2025, Precipio, Inc. announced a shift in its employee compensation strategy, offering senior management performance-based stock options instead of traditional time-vested options for 2025. These options will vest only if the company’s stock price reaches five times the exercise price of $6.06, reflecting management’s confidence in the company’s growth potential. The decision aims to align management’s interests with company performance, with the entire senior management opting for the performance-based structure, signaling optimism about future share price growth.