EDAP TMS (EDAP) AI Stock Analysis

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EDAP TMS

(NASDAQ:EDAP)

46Neutral

EDAP TMS is experiencing strong growth in its HIFU segment, but faces profitability and cash flow challenges. The stock is technically oversold, which may present a buying opportunity for some investors. However, the overall valuation remains concerning due to ongoing losses. Operational improvements and debt management are crucial for a brighter outlook.

Positive Factors

Business Focus

EDAP's plan to increase focus on higher-growth and -margin HIFU business should support consolidated sales growth and margin longer-term.

Market Expansion

CE Mark certification expected to tap into large market.

Revenue Growth

EDAP reported HIFU-related revenue of €4.5M, a 50% YoY increase from €3.0M, driven by higher procedure volume and disposable revenues.

Negative Factors

Competitive Risks

There is a potential need for capital, risk from intensifying prostate cancer tissue ablation competition, and risk from EU tariffs.

Product Discontinuation

EDAP plans to stop selling litho systems and reduce investment in its distribution business, expecting sales declines in these areas.

Rating Downgrade

Analyst lowers the rating from Buy to Hold, seeing downside to consensus estimates.

EDAP TMS (EDAP) vs. S&P 500 (SPY)

Market Cap

$56.84M

Dividend YieldN/A

Average Volume (3M)183.56K

Price to Earnings (P/E)―

Beta (1Y)1.02

Revenue Growth11.26%

EPS Growth-14.21%

CountryUS

Employees310

SectorHealthcare

Sector Strength74

IndustryMedical - Devices

Share Statistics

EPS (TTM)-0.57

Shares Outstanding37,103,780

10 Day Avg. Volume297,465

30 Day Avg. Volume183,561

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.80

Price to Cash Flow (P/CF)-4.20

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

$8.50

Price Target Upside459.21% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EDAP TMS Business Overview & Revenue Model

Company DescriptionEDAP TMS (EDAP) is a French company specializing in the development, manufacturing, and distribution of minimally invasive medical devices for urology. The company operates primarily in the medical technology sector, focusing on therapeutic ultrasound solutions. Its core products include the Focal One and Ablatherm devices, which are used for High-Intensity Focused Ultrasound (HIFU) treatment of prostate cancer, as well as devices for lithotripsy and other urological conditions.

How the Company Makes MoneyEDAP TMS generates revenue through the sale and leasing of its medical devices, particularly those focused on HIFU technology for treating prostate cancer. The company also earns money from providing maintenance services and consumables related to these devices. Additionally, EDAP TMS engages in strategic partnerships and collaborations with hospitals and clinics to expand the adoption of its technologies. Revenue is further bolstered by the company's efforts in expanding its market presence globally, particularly in Europe, Asia, and the United States.

EDAP TMS Financial Statement Overview

Summary

EDAP TMS faces significant financial challenges with ongoing losses and negative cash flows. While there is some revenue growth and a manageable debt level, persistent profitability issues and cash burn present risks that require strategic improvements for long-term sustainability.

Income Statement

Neutral

EDAP TMS has seen a moderate revenue growth rate of 4.26% TTM (Trailing-Twelve-Months) compared to the previous year-end, yet it continues to face profitability challenges with a negative EBIT and EBITDA margin, and a net profit margin of -34.96%. The consistent negative profitability metrics indicate significant operational challenges.

Balance Sheet

Neutral

The company's balance sheet shows a moderate debt-to-equity ratio of 0.14 TTM, indicating limited leverage. However, the return on equity remains negative at -51.65% TTM, reflecting ongoing losses. The equity ratio of 53.94% suggests a fairly balanced capital structure, though profitability issues pose risks.

Cash Flow

Negative

EDAP TMS exhibits a negative free cash flow growth rate and high free cash flow to net income ratio of 1.04 TTM, indicating cash burn challenges. The operating cash flow to net income ratio of 0.87 TTM suggests some alignment between cash flow and earnings, but overall cash management remains weak.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
63.00M	60.42M	55.11M	44.07M	41.66M	44.91M
	Gross Profit
25.84M	24.41M	24.19M	18.42M	18.38M	21.00M
	EBIT
-20.22M	-19.81M	-4.26M	-1.61M	-477.00K	185.00K
	EBITDA
-18.36M	-18.39M	-323.00K	309.00K	2.37M	2.06M
	Net Income Common Stockholders
-22.02M	-21.18M	-2.93M	700.00K	-1.70M	1.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.89M	43.47M	63.14M	47.18M	24.70M	20.89M
	Total Assets
35.94M	91.55M	101.12M	77.23M	55.19M	53.07M
	Total Debt
14.38M	8.42M	6.66M	8.16M	5.43M	8.66M
	Net Debt
7.01M	-35.05M	-56.48M	-39.02M	-19.26M	-12.22M
	Total Liabilities
27.04M	34.63M	29.49M	27.17M	28.95M	25.71M
	Stockholders Equity
8.90M	56.92M	71.63M	50.05M	26.25M	27.36M
Cash Flow		Free Cash Flow
-22.82M	-18.63M	-5.21M	2.89M	107.00K	2.35M
	Operating Cash Flow
-19.16M	-14.68M	-3.02M	4.45M	1.98M	3.80M
	Investing Cash Flow
-3.67M	-4.34M	-2.38M	-1.64M	-2.01M	-1.53M
	Financing Cash Flow
-483.66K	-911.00K	21.74M	20.27M	3.20M	-664.00K

EDAP TMS Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.52

Price Trends

50DMA

2.33

Negative

100DMA

2.31

Negative

200DMA

3.02

Negative

Market Momentum

MACD

-0.12

Positive

RSI

32.52

Neutral

STOCH

13.37

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDAP, the sentiment is Negative. The current price of 1.52 is below the 20-day moving average (MA) of 2.02, below the 50-day MA of 2.33, and below the 200-day MA of 3.02, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 32.52 is Neutral, neither overbought nor oversold. The STOCH value of 13.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EDAP.

EDAP TMS Risk Analysis

EDAP TMS disclosed 37 risk factors in its most recent earnings report. EDAP TMS 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

EDAP TMS Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INMD	80 Outperform	$1.08B	6.61	24.31%	―	-19.76%	0.38%
MDXG	67 Neutral	$1.06B	25.17	25.01%	―	8.52%	-32.91%
HCM	56 Neutral	$2.30B	59.14	5.06%	―	-25.48%	-63.36%
VIR	51 Neutral	$757.03M	―	-38.09%	―	-13.90%	16.56%
Sector *	48 Neutral	$6.36B	1.24	-44.94%	2.70%	18.33%	1.47%
EDAP	46 Neutral	$56.84M	―	-51.63%	―	11.26%	-14.21%
CUTRQ	36 Underperform	$171.58K	―		―	-32.57%	-15.03%

* Healthcare Sector Average

Performance Comparison

EDAP

EDAP TMS

1.52

-6.32

-80.61%

CUTRQ

Cutera

0.01

-1.92

-99.48%

MDXG

MiMedx Group

6.86

0.25

3.78%

HCM

HUTCHMED

12.53

-5.56

-30.74%

INMD

InMode

14.10

-4.37

-23.66%

VIR

Vir Biotechnology

5.28

-3.96

-42.86%

EDAP TMS Earnings Call Summary

Earnings Call Date: Mar 27, 2025 | % Change Since: -25.85% | Next Earnings Date: May 14, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth and achievements in the HIFU segment, including record sales, procedure growth, and positive regulatory developments. However, the company faced challenges such as an operating loss and a decline in distribution revenue. The sentiment remains positive with strong future growth expectations in the HIFU business.

Highlights

CE Mark for Focal One Robotic HIFU

Focal One Robotic HIFU received CE Mark for the treatment of deep infiltrating endometriosis, marking a significant regulatory milestone.

HIFU Revenue Growth

HIFU revenues increased by 15% year-over-year in the fourth quarter, with a total worldwide revenue growth of 5.7% over 2023.

Record Global Sales of Focal One Systems

A record global number of 11 Focal One systems sold in the fourth quarter, including strategic sales in the US and new markets such as Turkey and Portugal.

51% Growth in Focal One Procedures

Focal One procedures grew approximately 51% in 2024 compared to 2023, indicating strong adoption among urologists.

Publication of HIFI Study

The landmark HIFI study published in European Urology demonstrated Focal One's excellent oncologic control and better functional outcomes, potentially driving further adoption.

Positive Reimbursement Developments

CMS finalized a 5.4% increase in the Medicare hospital outpatient payment rate for HIFU procedures, effective January 1, 2025.

Lowlights

Operating Loss

The operating loss for the fourth quarter of 2024 was EUR3.7 million, a slight increase compared to EUR3.5 million in the fourth quarter of 2023.

Decline in Distribution Business Revenue

Total revenue for the distribution business decreased to EUR9.1 million in the fourth quarter of 2024 compared to EUR9.9 million in the fourth quarter of 2023.

Potential Impact of US Tariff Policies

Concerns about potential impacts from US tariff policies, although no material issues have been identified yet.

Company Guidance

During the EDAP TMS Fourth Quarter and Full Year 2024 Earnings Conference Call, several key financial metrics and guidance details were provided. The company reported a 15% year-over-year increase in HIFU revenues, reaching $9.3 million in the fourth quarter, contributing to a total worldwide revenue of $21.5 million, a 1.1% growth compared to the previous year. On a full-year basis, the 2024 global HIFU revenue grew by 15.3% over 2023, and worldwide revenues totaled $69.2 million, marking a 5.7% increase from 2023. The company sold 11 Focal One systems in the fourth quarter, with notable conversions from operating leases to cash purchases at major U.S. hospitals. The number of Focal One procedures in 2024 grew approximately 51% over 2023. Looking forward, EDAP expects HIFU revenue to increase between 16% and 25% in 2025, with an anticipated decline in non-core ESWL and distribution business by 20% to 25%. The recent CE Mark approval for Focal One in treating deep infiltrating endometriosis and the positive outcomes from the HIFI study are expected to drive further growth and adoption.

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.