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SurModics Inc (SRDX)
:SRDX
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SurModics
(NASDAQ:SRDX)
43Neutral
Positive Factors
Company Positioning
Surmodics is well-positioned as a leader in its core businesses (hydrophilic coatings and in vitro diagnostics), and it has invested heavily in recent years to develop whole products that leverage its established technologies, which have significant growth potential.
Financial Valuation
Analyst believes the Company is worth at least $43 per share with or without the acquisition, and the rating is upgraded to Buy as a result.
Negative Factors
Regulatory Issues
The U.S. Federal Trade Commission sued to block GTCR's pending acquisition of Surmodics alleging that the deal is anticompetitive.
SurModics (SRDX) vs. S&P 500 (SPY)
Market Cap
$393.28M
Dividend YieldN/A
Average Volume (3M)296.34K
Price to Earnings (P/E)―
Beta (1Y)1.24
Revenue Growth-9.23%
EPS Growth-359.07%
CountryUS
Employees389
SectorHealthcare
Sector Strength78
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-1.01
Shares Outstanding14,295,998
10 Day Avg. Volume294,698
30 Day Avg. Volume296,343
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.19
Price to Cash Flow (P/CF)-12.70
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
$43.00Price Target Upside56.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
SurModics Business Overview & Revenue Model
Company DescriptionSurModics, Inc. is a leading provider of surface modification and in vitro diagnostic technologies to the healthcare industry. The company operates primarily in the fields of medical devices and in vitro diagnostics, offering innovative solutions that enhance the performance of medical products. SurModics specializes in drug delivery coatings, thrombosis and inflammation reduction coatings, and various diagnostic products and technologies.
How the Company Makes MoneySurModics generates revenue through a combination of product sales, royalties, and licensing fees. The company's primary revenue streams include the sale of reagent products used in in vitro diagnostics and the licensing of its proprietary coating technologies to medical device manufacturers. SurModics' partnerships with major healthcare and medical device companies play a significant role in its revenue generation, as these collaborations often involve long-term agreements for the development and commercialization of advanced medical technologies. Additionally, the company earns royalties from products that utilize its patented technologies, further diversifying its income.
SurModics Financial Statement Overview
Summary
SurModics faces challenges with declining revenues and consistent losses, impacting profitability metrics negatively. Despite having no debt in the latest period, the company struggles with cash flow generation. The balance sheet remains robust with a high equity ratio, providing some financial stability.Income Statement
The company shows a declining trend in revenue and profitability. The TTM gross profit margin is healthy at approximately 73.4%, but the net profit margin is negative due to consistent losses. The company has not achieved positive EBIT or EBITDA margins in the recent TTM period, indicating operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet is relatively stable with no total debt in the TTM period, improving the debt-to-equity ratio to zero. However, the return on equity is negative due to net losses. The equity ratio is strong, indicating a solid base of equity compared to total assets.60
Neutral
Cash Flow
The company has shown a decline in free cash flow, with negative free cash flow in the TTM period. However, the operating cash flow to net income ratio suggests some efficiency in converting net income to cash flows despite losses. Free cash flow to net income ratio is not favorable due to negative free cash flow.50
Neutral
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 125.45M | 126.08M | 132.58M | 99.95M | 105.14M | 94.86M | Gross Profit |
| 92.05M | 93.05M | 61.02M | 29.00M | 41.23M | 29.36M | EBIT |
| -7.80M | -5.64M | 5.15M | -22.10M | 6.70M | -1.25M | EBITDA |
| 972.00K | 1.19M | 15.15M | -12.22M | 12.17M | 5.94M | Net Income Common Stockholders |
| -14.41M | -11.54M | -1.54M | -27.27M | 4.24M | 1.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 30.14M | 40.11M | 45.35M | 19.00M | 38.87M | 61.10M | Total Assets |
| 163.74M | 178.56M | 185.73M | 158.36M | 194.59M | 168.76M | Total Debt |
| 33.03M | 33.24M | 29.41M | 13.84M | 10.00M | 436.00K | Net Debt |
| 2.88M | -2.87M | -12.01M | -5.16M | -21.15M | -30.35M | Total Liabilities |
| 51.97M | 59.66M | 65.82M | 49.97M | 54.51M | 37.71M | Stockholders Equity |
| 111.77M | 118.90M | 119.91M | 108.39M | 140.09M | 131.06M |
| Cash Flow | Free Cash Flow | ||||
| -1.93M | -3.24M | 7.60M | -20.59M | 9.11M | 10.34M | Operating Cash Flow |
| 1.15M | 248.00K | 10.51M | -17.22M | 15.39M | 14.01M | Investing Cash Flow |
| 9.23M | -2.94M | -6.82M | 6.23M | -25.24M | -9.07M | Financing Cash Flow |
| -3.10M | -2.95M | 18.41M | -375.00K | 10.23M | -4.65M |
SurModics Technical Analysis
Negative
27.51
Price Trends
35.25
Negative
37.09
Negative
38.72
Negative
Market Momentum
-1.90
Positive
19.44
Positive
8.39
Positive
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 27.51 is below the 20-day moving average (MA) of 32.68, below the 50-day MA of 35.25, and below the 200-day MA of 38.72, indicating a bearish trend. The MACD of -1.90 indicates Positive momentum. The RSI at 19.44 is Positive, neither overbought nor oversold. The STOCH value of 8.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SRDX.
SurModics Risk Analysis
SurModics disclosed 41 risk factors in its most recent earnings report. SurModics 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
SurModics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $140.97B | 76.57 | 9.03% | ― | 17.60% | 16.84% | |
73 Outperform | $1.85B | 42.09 | 13.87% | 0.78% | 13.63% | 44.78% | |
71 Outperform | $1.91B | 14.73 | 14.74% | 1.28% | 4.98% | 104.60% | |
61 Neutral | $27.64B | 49.64 | 27.63% | ― | 11.34% | 4.24% | |
53 Neutral | $3.41B | ― | -5.76% | ― | 5.28% | -292.14% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% | |
43 Neutral | $393.28M | ― | -12.32% | ― | -9.23% | -359.07% |
* Healthcare Sector Average
Performance Comparison
SRDX
SurModics
27.51
-1.85
-6.30%
BSX
Boston Scientific
95.52
28.03
41.53%
CNMD
Conmed
61.93
-22.12
-26.32%
DXCM
Dexcom
70.26
-65.12
-48.10%
ICUI
ICU Medical
138.99
38.15
37.83%
LMAT
Lemaitre Vascular
82.30
16.62
25.30%
SurModics Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -23.11% | Next Earnings Date: Apr 30, 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.Highlights
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.
Lowlights
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.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.