Sofwave (SOFW) AI Stock Analysis

• Market Cap: 1.27B
• Dividend Yield: N/A
• Average Volume (3M): 26.78K
• Price to Earnings (P/E): 654.5
• Beta (1Y): 0.20
• Revenue Growth: 29.55%
• EPS Growth: N/A
• Country: IL
• Employees: 126
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 9.30
• Shares Outstanding: 36,006,634
• 10 Day Avg. Volume: 28,238
• 30 Day Avg. Volume: 26,779
• PEG Ratio: 0.69
• Price to Book (P/B): 5.90
• Price to Sales (P/S): 2.43
• P/FCF Ratio: -54.13
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: 3,478.00 ▲(24.21% Upside)

The score is primarily supported by strong financial momentum (rapid revenue growth, strong gross margins, improving cash flow, and low leverage) and constructive technical trend signals. It is meaningfully tempered by very expensive valuation (P/E 577.38) and ongoing profitability/ROE weakness, with RSI suggesting the stock may be overextended near-term.

Positive Factors

Rapid revenue growth

Sustained TTM revenue growth of ~82.5% shows durable market adoption of Sofwave's ultrasound platform. Over a multi-month horizon this supports expanding clinic penetration, a growing installed base, and operating leverage potential that can fund R&D, training and commercial scale.

High gross margins

A ~76% gross margin reflects strong product economics for devices and consumables. Structurally high gross margins provide a lasting cushion to absorb SG&A, support investment in clinical evidence and training, and make sustainable operating profitability achievable as volume scales.

Low leverage with improving cash generation

Very low debt-to-equity and a 326% TTM free cash flow improvement indicate a resilient balance sheet and improving cash conversion. This structural strength increases financial flexibility for capex, partnerships or M&A and reduces refinancing risk during multi-month cycles.

Negative Factors

Negative net profitability and ROE

Despite strong revenue and gross margins, Sofwave reports a negative net margin and negative ROE. Persisting unprofitability hampers long-term shareholder value creation and implies the company must deliver sustained operating leverage or cut costs to convert top-line strength into durable profits.

Limited organizational scale

A headcount of 126 suggests constrained commercial, clinical and support capacity versus larger peers. Limited scale can raise per-unit SG&A, slow geographic roll-out and make margin improvement heavily dependent on rapid personnel and distribution scaling over the coming months.

Concentrated revenue model reliant on device sales

Reliance on capital equipment and consumable sales creates lumpy, cycle-driven revenue and limits predictability. Unless recurring service/maintenance or consumable attachment rates grow materially, revenue and margin stability will remain sensitive to replacement cycles and procedure demand.

Sofwave Business Overview & Revenue Model

Company Description

Sofwave Medical Ltd. develops an ultrasound technology for treating fine lines and wrinkles in Israel and internationally. It offers non-invasive skin treatment aesthetic medical devices to physicians. The company was incorporated in 2015 and is based in Yokne'am Illit, Israel.

How the Company Makes Money

Sofwave generates revenue primarily through the sale of its medical devices and related consumables to healthcare providers, including dermatologists and cosmetic surgeons. The company operates a direct sales model, often providing training and support to practitioners to ensure the effective use of their devices. Additionally, Sofwave may generate recurring revenue from service agreements and maintenance for their equipment. Partnerships with healthcare institutions and participation in industry conferences also enhance their market presence and can lead to increased sales opportunities, contributing to overall earnings.

Sofwave Financial Statement Overview

Summary

Sofwave shows positive revenue growth and a strong gross profit margin, but struggles with profitability and cash flow stability. The low debt profile is a positive, but negative net profit margins and declining free cash flow growth are concerning.

Income Statement

Sofwave has shown a positive revenue growth rate of 10.05% in the TTM, indicating a growing market presence. However, the company is struggling with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin remains strong at 76.25%, suggesting efficient production processes, but the overall profitability is hindered by high operating expenses.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.06, indicating low leverage and reduced financial risk. However, the return on equity is negative, highlighting challenges in generating returns for shareholders. The equity ratio is healthy, suggesting a solid capital structure.

Cash Flow

The cash flow statement shows a concerning decline in free cash flow growth, with a significant negative growth rate of -197.34% in the TTM. Despite this, the company maintains a positive free cash flow to net income ratio, indicating some ability to convert profits into cash. The operating cash flow to net income ratio is negative, reflecting challenges in cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	126.83M	59.65M	50.31M	35.63M	21.84M	4.29M
Gross Profit	94.90M	45.34M	37.48M	26.33M	16.24M	2.63M
EBITDA	8.98M	-2.19M	-6.61M	-17.55M	-6.43M	-11.32M
Net Income	3.00M	-4.55M	-8.28M	-19.53M	-6.83M	-11.69M
Balance Sheet
Total Assets	155.15M	43.03M	43.54M	46.08M	60.77M	4.82M
Cash, Cash Equivalents and Short-Term Investments	87.62M	21.62M	24.42M	32.01M	46.22M	2.64M
Total Debt	4.49M	1.40M	1.33M	1.92M	2.37M	78.00K
Total Liabilities	62.60M	18.50M	17.19M	13.74M	14.07M	3.29M
Stockholders Equity	92.55M	24.53M	26.34M	32.34M	46.70M	1.53M
Cash Flow
Free Cash Flow	11.09M	-2.67M	-6.71M	-11.14M	-2.92M	-5.07M
Operating Cash Flow	11.73M	-2.40M	-6.31M	-10.69M	-2.10M	-4.80M
Investing Cash Flow	-857.35K	254.00K	409.00K	-260.00K	-982.00K	-263.00K
Financing Cash Flow	-572.13K	-620.00K	-1.72M	-1.35M	46.64M	1.99M

Sofwave Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2800.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:SOFW, the sentiment is Positive. The current price of 2800 is below the 20-day moving average (MA) of 2928.55, below the 50-day MA of 2911.46, and above the 200-day MA of 2427.51, indicating a bullish trend. The MACD of 119.30 indicates Negative momentum. The RSI at 75.90 is Negative, neither overbought nor oversold. The STOCH value of 90.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:SOFW.

Sofwave Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BWAY	77 Outperform	1.51B	64.67	10.95%	―	21.13%	251.25%
SOFW	64 Neutral	1.27B	654.50	―	―	29.55%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%