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Brainsway Ltd (IL:BWAY)
:BWAY
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Brainsway
(BWAY)
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Rating:76Outperform
Price Target:
4,720.00
▲(26.95% Upside)
Action:ReiteratedDate:03/12/26
The score is driven primarily by strong financial momentum (revenue growth, profitability turn, improving cash generation, and a conservative balance sheet) and supportive technical trends (price above key moving averages with positive momentum). These positives are tempered by a demanding valuation (high P/E, no dividend) while the earnings call adds support via raised guidance and strong demand indicators despite some cost and regulatory-delay headwinds.
Positive Factors
Installed base growth
A growing installed base (1,600+ systems; 90 units shipped in quarter, +43% YoY) creates durable revenue visibility via recurring consumables, service and maintenance. Larger installed base supports utilization gains, provider adoption and operating leverage over the medium term.
Improved cash generation
Sharp improvement to sustained positive operating and free cash flow provides internal funding for growth initiatives, reduces dependence on external financing, and supports reinvestment in sales, R&D and partnerships—enhancing capital efficiency and resilience over coming quarters.
Conservative balance sheet
Modest debt and rising equity position a company to fund strategic investments or acquisitions without undue refinancing stress. The conservative balance sheet increases financial flexibility to support commercialization, minority investments and slower repair cycles if needed.
Negative Factors
Recent profit inflection risk
Transitioning from multi-year losses to profitability is encouraging but creates execution risk: sustaining margin gains and net income requires continued revenue growth, consistent utilization and cost discipline. A reversal would quickly pressure cash generation and investor confidence.
Rising operating expenses
Elevated S&M and R&D spending supports market expansion and product development but raises fixed cost base. If system placements or utilization growth slow, higher operating expenses could compress operating margins and reduce the cushion from recent cash-flow improvements.
Regulatory & reimbursement exposure
Delays in partner FDA clearances and dependence on reimbursement policies are structural risks: slower regulatory timelines or adverse reimbursement decisions can delay adoption, reduce clinic utilization and defer recurring service/consumable revenue, impacting multi-quarter growth visibility.
Brainsway (BWAY) vs. iShares MSCI Israel ETF (EIS)
Market Cap
₪1.66B
Dividend YieldN/A
Average Volume (3M)85.46K
Price to Earnings (P/E)60.8
Beta (1Y)0.05
Revenue Growth21.13%
EPS Growth251.25%
CountryIL
Employees120
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)26.00
Shares Outstanding39,266,730
10 Day Avg. Volume88,081
30 Day Avg. Volume85,462
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)5.11
Price to Sales (P/S)6.62
P/FCF Ratio21.25
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Brainsway Business Overview & Revenue Model
Company DescriptionBrainsway Ltd. develops and sells noninvasive neurostimulation treatments for mental health disorders in the United States, Europe, Israel, and internationally. It offers Deep Transcranial Magnetic Stimulation platform technology for the treatment of major depressive disorders, anxious depression, obsessive-compulsive disorders, smoking addiction, bipolar disorders, post traumatic stress disorders, schizophrenia, Alzheimer's disease, autism, chronic pain, multiple sclerosis, post stroke rehabilitation, and Parkinson's diseases. The company primarily serves doctors, hospitals, and medical centers in the field of psychiatry. Brainsway Ltd. was founded in 2003 and is headquartered in Jerusalem, Israel.
How the Company Makes MoneyBrainsWay generates revenue primarily by selling and/or leasing its Deep TMS systems to clinics, hospitals, and other healthcare providers, and by recurring revenue tied to ongoing use of those systems. Key revenue streams include: (1) capital equipment revenue from the sale (and in some cases leasing arrangements) of Deep TMS treatment systems installed at customer sites; (2) recurring revenue from consumables and accessories associated with delivered treatments (e.g., treatment coils/other system-related components used over time) and service-related items tied to the installed base; and (3) service, support, and maintenance revenues (such as warranties, extended service contracts, and technical support) that typically follow system placements. The company’s earnings are influenced by growth in the installed base of systems, utilization (treatment volume) at customer sites, reimbursement dynamics for TMS procedures, and expansion of regulatory clearances/clinical adoption for additional indications, which can increase demand from providers and drive both system placements and recurring revenue.
Brainsway Earnings Call Summary
Earnings Call Date:Nov 11, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in revenue and system shipments, successful strategic investments, and improved financial guidance. However, there were increased operating expenses and delays in FDA clearance for a strategic partner's product. Overall, the positives significantly outweigh the negatives.Q3-2025 Updates
Positive Updates
Record Quarterly Revenue
BrainsWay reported record quarterly revenue of $13.5 million for Q3 2025, a 29% increase compared to the same period last year.
Increase in Deep TMS System Shipments
The company shipped 90 Deep TMS systems during the quarter, a 43% increase compared to the same period last year, bringing the total installed base to over 1,600 systems globally.
Raised Financial Guidance
BrainsWay raised the midpoint of their full-year 2025 revenue guidance to $51-52 million, up from $50-52 million, and increased expected operating profit to 6-7% of revenue from 4-5%.
FDA Approval for Accelerated Protocol
The U.S. FDA granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder, potentially improving patient convenience and appeal.
Strategic Investments and Growth
BrainsWay made strategic minority investments in mental health providers, with utilization of Deep TMS systems at partner clinics increasing over 50% since collaboration.
Strong Financial Performance
Q3 2025 gross profit was $10.2 million, with a strong gross margin of 75%. Net profit increased to $1.6 million from $0.7 million in Q3 2024.
Negative Updates
Increased Operating Expenses
Sales and marketing expenses increased to $4.7 million from $4.1 million, and R&D expenses increased to $2.4 million from $1.8 million year-over-year.
Delay in FDA Clearance for Neurolief
Anticipated FDA clearance for Neurolief's product has been delayed, affecting potential market launch timelines.
Company Guidance
In the recent BrainsWay Third Quarter 2025 Earnings Conference Call, the company reported a record quarterly revenue of $13.5 million, marking a 29% increase from the previous year, driven by the shipment of 90 Deep TMS systems, a 43% rise year-over-year, expanding their installed base to over 1,600 systems globally. With increased visibility for the remainder of the year, BrainsWay raised its full-year revenue guidance to $51 million to $52 million from the previous range of $50 million to $52 million, and projected operating profit margins of 6% to 7%, up from 4% to 5%, and adjusted EBITDA margins of 13% to 14%, up from 12% to 13%. The company emphasized strategic efforts including minority interest investments in mental health providers, with utilization up over 50% in certain clinics, and highlighted regulatory advancements like the U.S. FDA's approval for an accelerated Deep TMS protocol for treating major depressive disorder, anticipated to enhance market appeal. BrainsWay's performance reflects strong market demand with a book-to-bill ratio of 1.3x and remaining performance obligations of $65 million, signaling solid future revenue prospects.Brainsway Financial Statement Overview
Summary
Strong multi-year revenue scaling and a clear profitability inflection (losses through 2023, positive net income in 2024 with higher profits in 2025). Gross margins remain high (~mid-70%), operating and free cash flow ramped materially in 2024–2025, and leverage is modest versus a growing equity base; the main offset is the relatively recent transition from losses and historically inconsistent cash flow.Income Statement
Revenue has scaled strongly (about 22.1M in 2020 to 56.5M in 2025), with solid recent growth (2024: ~29% and 2025: ~15%). Profitability has materially improved: the company moved from multi-year losses (2020–2023) to positive net income in 2024 and a meaningfully higher profit level in 2025. Gross profit remains high (roughly mid-70% in the years provided), supporting operating leverage, though the history of negative operating results as recently as 2023 highlights some volatility and execution risk.78
Positive
Balance Sheet
The balance sheet looks conservative, with low leverage historically (debt-to-equity was ~0.01–0.09 in 2020–2024). Equity has grown over time (about 19.6M in 2020 to 73.2M in 2025), indicating improving balance sheet strength and financial flexibility. Total debt rose in 2025 (to ~6.8M), but remains modest relative to equity, suggesting limited balance-sheet risk.84
Very Positive
Cash Flow
Cash generation improved sharply: operating cash flow increased from negative/low levels earlier in the period to ~10.3M in 2024 and ~19.5M in 2025, with free cash flow turning strongly positive (~6.5M in 2024 and ~17.6M in 2025). That said, free cash flow growth was slightly negative in 2025 versus 2024, and the company’s cash flow profile has been inconsistent historically (including negative free cash flow in multiple earlier years), which tempers the score despite the strong recent step-up.76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 56.53M | 41.02M | 31.79M | 27.18M | 29.66M |
| Gross Profit | 42.63M | 30.58M | 23.48M | 20.05M | 23.06M |
| EBITDA | 6.34M | 5.36M | -2.56M | -11.45M | -4.67M |
| Net Income | 8.26M | 2.92M | -4.20M | -13.35M | -6.46M |
Balance Sheet | |||||
| Total Assets | 112.94M | 94.32M | 62.97M | 64.48M | 75.73M |
| Cash, Cash Equivalents and Short-Term Investments | 67.97M | 69.34M | 45.98M | 47.85M | 57.35M |
| Total Debt | 6.82M | 5.62M | 471.00K | 488.00K | 754.00K |
| Total Liabilities | 34.67M | 32.00M | 21.39M | 19.08M | 18.41M |
| Stockholders Equity | 73.24M | 62.31M | 41.58M | 45.40M | 57.32M |
Cash Flow | |||||
| Free Cash Flow | 17.62M | 6.50M | -1.10M | -7.82M | -1.35M |
| Operating Cash Flow | 19.51M | 10.30M | 1.28M | -9.76M | 884.00K |
| Investing Cash Flow | -18.94M | 30.31M | -37.41M | 42.17M | -42.22M |
| Financing Cash Flow | -2.40M | 18.26M | -1.03M | -1.55M | 41.52M |
Brainsway Technical Analysis
Positive
3718.00
Price Trends
3715.38
Positive
3230.32
Positive
2741.06
Positive
Market Momentum
135.98
Negative
66.45
Neutral
81.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:BWAY, the sentiment is Positive. The current price of 3718 is below the 20-day moving average (MA) of 3868.60, above the 50-day MA of 3715.38, and above the 200-day MA of 2741.06, indicating a bullish trend. The MACD of 135.98 indicates Negative momentum. The RSI at 66.45 is Neutral, neither overbought nor oversold. The STOCH value of 81.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:BWAY.
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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.