Is Ra Medical Systems a Fantastic Penny Stock to Own?


The shares of commercial-stage medical device manufacturer Ra Medical Systems (RMED) have tumbled 92.7% in rate over the past year as a result of investor concerns surrounding the company’s poor economic health. Also, offered the uncertainty bordering the FDA’s approval of its DABRA catheter laser system, the concern becomes, is the penny stock a winner currently? Keep reading, allow’s discover.

Medical gadget firm Ra Medical Systems, Inc. (RMED – Get Ranking) in Carlsbad, Calif., is layouts, creates, and also markets excimer lasers to deal with vascular conditions. The firm has made considerable progression in vital efforts, including its DABRA technology laser system and atherectomy pivotal medical research study. However, the RMED stock has decreased 86.8% in price over the past 6 months and also 92.7% over the past year, mirroring financier concerns over its disappointing income and revenues development and the sale of its dermatology business.

Closing yesterday’s session at $0.42, the stock is currently trading 95.7% listed below its 52-week high of $9.82, suggesting bearish view.

While the commercial-stage medical gadget business has actually submitted a 510( k) application with the united state Food and Drug Administration (FDA) for its DABRA catheter, its commercialization potential customers remain unclear till its item obtains approval from the FDA. Moreover, the stock’s adverse profitability might make capitalists anxious.

Marketing Shares

Last month, RMED valued an underwritten public offering of devices of its common stock, consisting of warrants to buy as much as 27.6 million shares of the common stock and pre-funded warrants to purchase up to 14.47 shares of penny stocks. The medical device producer anticipates about $12.1 million in gross profits from the offering.

Divestiture of Dermatology Service

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In the third quarter, RMED finished the sale of its Pharos dermatology service for web profits of approximately $3.5 million. This was done as a part of the business’s strategies to focus its sources on the marketplace for medical tools to deal with outer artery condition (PAD). Nevertheless, the divestiture could negatively influence the medical device maker’s earnings and also price framework in the close to term and cause RMED’s stock cost to tumble even more.

Grim Productivity

The business’s trailing-12-month ROA and cash from operations are adverse 100.6% as well as $31.33 million, specifically. In addition, its trailing-12-month gross profit margin, ROE and also ROTC are unfavorable 18.9%, 115%, and 67%, specifically. As well as its 0.12% asset turnover proportion is 65.2% lower than the 0.34% market average.

Faltering Financials
RMED’s web earnings from continuing procedures came in at $5,000 for the 3rd quarter, finished Sept. 30, 2021, versus $68,000 in the 3rd quarter of 2020. Its gross loss stood at $24,000 for the quarter, while operating loss can be found in at $7.39 million. Furthermore, its net loss amounted to $4.3 million, while its loss per share came in at $0.67. RMED reported an adverse modified EBITDA of $6.95 million versus $6.06 million in the prior-year quarter. As well as its total overhead grew 2.1% year-over-year to $7.15 million during this period.

POWR Scores Show Bleak Prospects

RMED has a general D ranking, which equates to Sell in our POWR Ratings system. The POWR Rankings are determined by considering 118 unique elements, with each variable heavy to an optimal degree.

Our exclusive ranking system also evaluates each stock based upon eight distinct categories. RMED has an F grade for Top quality. This mirrors the stock’s unfavorable ROA as well as cash flow from procedures.

The firm has a D grade in Momentum, constant with its cost decline over the past six months. Also, it has an F quality for Stability, which remains in sync with its reasonably high beta of 1.65.

Past the grades I have actually highlighted, one can look into additional RMED rankings for Belief, Growth, as well as Worth below. Among the 166 stocks in the D-rated Medical– Instruments & Equipment sector, RMED is rated # 119.

Profits

Analysts expect RMED’s EPS to continue to be unfavorable this year. While its efforts to create DABRA catheters bode well, its unfavorable revenue margin and poor financial toughness might cause its shares to decrease further. In addition, the unpredictability bordering the regulatory clearance as well as commercialization of its DABRA laser system might elevate investors’ worries. So, we believe it is finest avoided currently.

Exactly How Does Ra Medical Systems (RMED) Stack Up Against its Peers?

While RMED has an overall D (Offer) score in our proprietary score system, one might want to take into consideration taking a look at its sector peers, Fonar Corporation (FONR – Get Score), Electromed, Inc. (ELMD – Get Score), and Abbott Laboratories (ABT – Obtain Ranking), having an A (Strong Buy) score.