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DermTech (DMTKQ)
OTHER OTC:DMTKQ
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DermTech
(OTC:DMTKQ)
Rating:40Underperform
Price Target:―
DermTech (DMTKQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.52K
Dividend YieldN/A
Average Volume (3M)102.77K
Price to Earnings (P/E)―
Beta (1Y)-63.76
Revenue Growth9.71%
EPS Growth31.13%
CountryUS
Employees206
SectorHealthcare
Sector Strength39
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-2.69
Shares Outstanding35,253,582
10 Day Avg. Volume129,687
30 Day Avg. Volume102,771
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)0.40
Price to Sales (P/S)0.00
P/FCF Ratio-0.54
Enterprise Value/Market Cap20.28K
Enterprise Value/Revenue1.20
Enterprise Value/Gross Profit53.63
Enterprise Value/Ebitda-0.18
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
DermTech Business Overview & Revenue Model
Company DescriptionDermTech, Inc., a molecular diagnostic company, engages in the development and marketing of novel non-invasive genomics tests to aid in the diagnosis and management of melanoma in the United States. The company provides DermTech Melanoma Test (DMT), an innovative non-invasive way to enhance melanoma detection for developing product for non-melanoma skin cancers. It also offers DermTech Smart Sticker, which provides a non-invasively way to collect skin sample including standard care by using scalpel to biopsy suspicious lesions. In addition, it provides research services and technology platform on a contract basis to pharmaceutical companies which use the technology for clinical trials. Further, the company develops gene expression assays for the psoriasis, atopic dermatitis, and aging of the skin to pharmaceutical companies to develop drug products in dermatology; and develop custom gene assays to support the pharmaceutical partners. It sells its products through pathology and oncology practitioners. DermTech, Inc. is headquartered in San Diego, California. On June 18, 2024, DermTech, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
How the Company Makes MoneyDermTech generates revenue primarily through the sale of its genomic testing services, particularly the DermTech Melanoma Test. The company partners with dermatologists and healthcare providers who utilize its tests to improve diagnostic accuracy for skin cancer, allowing for early detection and treatment. DermTech charges fees per test conducted, thus generating income based on the volume of tests processed. Additionally, the company may enter into collaborations with research institutions and pharmaceutical companies for the development of new products or research studies, potentially providing additional revenue streams. Insurance reimbursements are also a significant component of DermTech's revenue model, as coverage by major insurance providers facilitates broader adoption of its tests.
DermTech Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q4-2023)
| % Change Since: -50.00%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Neutral
DermTech demonstrated significant financial and operational improvements, including increased ASP, cost reductions, and positive study results. However, challenges such as decreased sample volume, payer reimbursement issues, and high operating expenses remain. While optimistic about future payer coverage and cost management, volume declines and financial sustainability present ongoing concerns.Q4-2023 Updates
Positive Updates
Significant Increase in Average Selling Price (ASP)
The ASP for the DermTech Melanoma Test (DMT) grew 55% year-over-year, indicating successful pricing strategies and payer coverage improvements.
Record in Medicare Proportion of Billable Samples
The company reported an all-time high in the Medicare proportion of billable samples, increasing sequentially from 27% to 28%.
Cost Reduction and Financial Improvements
DermTech announced restructuring actions leading to an expected reduction in annualized operating expenses by approximately $40 million compared to 2022, with a 32% decrease in net loss while test revenue increased by 38%.
Positive TRUST 2 Study Results
The TRUST 2 study reaffirmed the DMT’s real-world clinical utility with a high negative predictive value (NPV) of 99.7% to rule out melanoma.
Favorable Coverage Decisions and Legislation
New favorable coverage decisions from Blues plans and legislative efforts in 14 states mandating insurance coverage of genomic testing show positive momentum in payers' acceptance.
Negative Updates
Decrease in Billable Sample Volume
Billable sample volume declined 11% year-over-year to approximately 15,580 samples, attributed to a focus on reimbursed tests and a reduction in sales force size.
Challenges with Major Commercial Payers
Some administrative and billing obstacles remain with major commercial payers, affecting payment rates despite coverage.
Projected Decline in Volumes for First Half of 2024
The company expects DMT volumes could be flat to modestly down for the first half of 2024 due to restructuring and refocused tactics.
High Operating Expenses Relative to Revenue
Despite cost-cutting measures, the company projects high operating expenses of approximately $80 million for 2024, challenging financial sustainability with current revenue levels.
Company Guidance
During DermTech's Fourth Quarter 2023 Earnings Call, the company provided several key metrics reflecting its financial and operational performance. Notably, the Average Selling Price (ASP) for the DermTech Melanoma Test (DMT) rose by 55% year-over-year, while test revenue saw a 38% increase. The company also achieved the highest gross margin in six quarters. DermTech reported a reduction in annualized operating expenses by approximately $40 million compared to 2022, following restructuring actions. The Medicare proportion of billable samples reached a record high, contributing to the ASP improvement. For 2024, the company anticipates flat to modestly down test volumes in the first half, with an ongoing focus on ASP and revenue growth. Additionally, DermTech's total operating expenses for 2024 are projected to be around $80 million. The company maintains a cash runway into the first quarter of 2025, with cash burn expected to decline to $55 million to $60 million annually, representing a 40% decrease from 2022.DermTech Financial Statement Overview
Summary
DermTech faces significant financial challenges, with weak profitability and cash flow. Revenue growth is modest but insufficient to cover high operating losses. The balance sheet remains stable but indicates increasing liabilities.Income Statement
DermTech's revenue has shown a modest growth trend over the years, with a 5.36% increase from 2022 to 2023. However, the company is struggling with profitability, as indicated by a negative net profit margin and declining gross profit. The EBIT and EBITDA margins further highlight the company's operational challenges.45
Neutral
Balance Sheet
The company's balance sheet reveals a moderate level of debt, with a debt-to-equity ratio of 0.95 as of 2023. The equity ratio has decreased, reflecting a greater reliance on liabilities. Although the stockholders' equity has declined, the company maintains a stable level of assets.50
Neutral
Cash Flow
DermTech's cash flow is under pressure, with negative free cash flow and operating cash flow. The free cash flow has improved slightly from the previous year but remains negative. The company is heavily reliant on financing activities to manage cash needs.40
Negative
| Breakdown | TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.66M | 15.30M | 14.52M | 11.84M | 5.88M | 3.36M |
| Gross Profit | 1.33M | 276.00K | 647.00K | 1.27M | -96.00K | 60.00K |
| EBITDA | -86.62M | -97.89M | -113.70M | -75.10M | -34.80M | -17.38M |
| Net Income | -89.63M | -100.89M | -116.68M | -78.33M | -36.48M | -20.13M |
Balance Sheet | ||||||
| Total Assets | 102.97M | 121.93M | 202.07M | 248.31M | 69.78M | 18.21M |
| Cash, Cash Equivalents and Short-Term Investments | 38.98M | 55.86M | 126.17M | 225.33M | 63.78M | 15.37M |
| Total Debt | 53.67M | 54.39M | 55.83M | 7.86M | 335.00K | 0.00 |
| Total Liabilities | 62.98M | 64.75M | 69.72M | 18.61M | 7.94M | 5.72M |
| Stockholders Equity | 39.99M | 57.17M | 132.35M | 229.70M | 61.84M | 12.49M |
Cash Flow | ||||||
| Free Cash Flow | -72.22M | -77.88M | -98.56M | -64.83M | -30.52M | -18.00M |
| Operating Cash Flow | -72.07M | -76.98M | -95.26M | -62.11M | -28.68M | -17.79M |
| Investing Cash Flow | 45.89M | 29.86M | -4.32M | -12.51M | -41.34M | -210.00K |
| Financing Cash Flow | 5.29M | 6.08M | 917.00K | 230.28M | 78.90M | 28.62M |
DermTech Risk Analysis
DermTech disclosed 63 risk factors in its most recent earnings report. DermTech 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
DermTech Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $561.86M | 30.59 | -1.20% | ― | 38.43% | 86.19% | |
59 Neutral | HK$15.37B | 5.69 | -7.44% | 4.08% | 11.55% | -28.15% | |
52 Neutral | $590.01M | ― | -51.25% | ― | 15.57% | 31.82% | |
50 Neutral | $487.62M | ― | -13.84% | ― | 7.38% | 60.45% | |
46 Neutral | $155.92M | ― | -91.03% | ― | -40.09% | -18.67% | |
42 Neutral | $40.42M | ― | -1454.41% | ― | 35.76% | 47.48% | |
40 Underperform | $3.52K | ― | ― | 9.71% | 31.13% |
* Healthcare Sector Average
Performance Comparison
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BDSX
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0.28
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.