Pulmonx (LUNG) AI Stock Analysis

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Pulmonx

(NASDAQ:LUNG)

51Neutral

Pulmonx's overall stock score reflects its strong revenue growth and international expansion, counterbalanced by ongoing profitability challenges and bearish technical indicators. Although the earnings call conveyed optimism for future growth, the stock's negative valuation metrics and persistent net losses weigh heavily on its attractiveness. Strategic operational improvements are critical for enhancing financial health and investor confidence.

Positive Factors

Financial Stability

Over $100M of cash provides a robust runway, with a $30M burn in 2024, indicating strong financial stability.

Growth Strategy

The 'acquire, test, treat' strategy, including initiatives to increase funnel interest and reduce patient fallout, is expected to drive growth acceleration.

Valuation

The company is trading at a compelling valuation, reiterating a BUY rating and $16 price target.

Negative Factors

Market Penetration Challenges

The main bear case includes greater than anticipated tariff impact and lack of growth reacceleration, with the exact formula to penetrate the end market still being explored.

Tariffs Impact

Tariffs could impact the business through component sourcing cost inflation and other countries' reciprocal tariffs, potentially harming gross margins.

Pulmonx (LUNG) vs. S&P 500 (SPY)

Market Cap

$209.29M

Dividend YieldN/A

Average Volume (3M)331.21K

Price to Earnings (P/E)―

Beta (1Y)1.03

Revenue Growth22.01%

EPS Growth10.02%

CountryUS

Employees291

SectorHealthcare

Sector Strength69

IndustryMedical - Devices

Share Statistics

EPS (TTM)-1.44

Shares Outstanding40,247,480

10 Day Avg. Volume316,441

30 Day Avg. Volume331,207

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.69

Price to Cash Flow (P/CF)-11.50

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

$13.17

Price Target Upside153.27% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Pulmonx Business Overview & Revenue Model

Company DescriptionPulmonx Corporation (LUNG) is a medical technology company specializing in the development and commercialization of innovative solutions for the treatment of chronic obstructive pulmonary disease (COPD) and other severe lung conditions. The company's flagship product, the Zephyr Endobronchial Valve, is a minimally invasive treatment option that helps improve breathing and quality of life for patients with emphysema, a form of COPD. Pulmonx operates in the healthcare sector, focusing on advancing pulmonary care through its proprietary technologies.

How the Company Makes MoneyPulmonx generates revenue primarily through the sale of its Zephyr Endobronchial Valve system to hospitals and healthcare providers. The company's revenue model is based on direct sales and distribution agreements with partners in various regions, including North America, Europe, and Asia Pacific. Additionally, Pulmonx may engage in strategic partnerships and collaborations with healthcare institutions to expand the adoption of its products and enhance market penetration. The company's financial performance is driven by the growing demand for minimally invasive treatments for lung diseases, as well as its efforts in expanding its sales network and increasing awareness among healthcare professionals.

Pulmonx Financial Statement Overview

Summary

Pulmonx is experiencing significant revenue growth, but continues to struggle with profitability. The balance sheet shows moderate strength with manageable leverage, though negative return on equity highlights profitability issues. Cash flow management is a challenge, requiring improvements to enhance liquidity.

Income Statement

Neutral

Pulmonx has demonstrated a consistent revenue growth with a 22% increase from 2023 to 2024. However, the company has been facing persistent losses, with a negative net profit margin of -67% in 2024. Gross profit margin stands strong at 74%, indicating efficient production compared to revenue. Nonetheless, negative EBIT and EBITDA margins highlight ongoing operational challenges.

Balance Sheet

Neutral

Pulmonx maintains a stable balance sheet with an equity ratio of 53% in 2024, showing a reasonable proportion of assets financed by equity. The debt-to-equity ratio is 0.66, indicating manageable leverage levels. However, the negative return on equity (-66%) reflects the company's struggles to generate profit from its equity base.

Cash Flow

Neutral

The company has shown a reduction in free cash flow deficit by about 14% year-over-year, indicating slight improvement in cash generation. However, the operating cash flow to net income ratio is negative, underscoring ongoing cash flow challenges. The free cash flow to net income ratio is also negative, indicating insufficient cash flow to cover net losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
83.79M	68.67M	53.66M	48.42M	32.73M
	Gross Profit
62.00M	50.75M	39.87M	35.63M	21.20M
	EBIT
-57.70M	-61.94M	-58.64M	-47.30M	-32.33M
	EBITDA
-57.70M	-55.09M	-55.99M	-46.62M	-28.44M
	Net Income Common Stockholders
-56.39M	-60.84M	-58.92M	-48.66M	-32.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
101.48M	117.10M	141.14M	180.04M	231.56M
	Total Assets
162.85M	177.78M	193.68M	235.17M	263.71M
	Total Debt
56.47M	41.42M	24.40M	26.46M	27.22M
	Net Debt
-14.43M	-42.12M	-77.33M	-122.02M	-204.34M
	Total Liabilities
77.04M	59.47M	39.67M	41.93M	37.57M
	Stockholders Equity
85.81M	118.31M	154.01M	193.24M	226.13M
Cash Flow		Free Cash Flow
-32.98M	-38.42M	-46.40M	-45.06M	-31.54M
	Operating Cash Flow
-31.54M	-37.61M	-45.08M	-41.39M	-30.63M
	Investing Cash Flow
17.48M	-2.01M	-4.22M	-46.26M	12.69M
	Financing Cash Flow
1.36M	21.40M	2.47M	4.46M	234.83M

Pulmonx Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.20

Price Trends

50DMA

6.93

Negative

100DMA

6.65

Negative

200DMA

6.85

Negative

Market Momentum

MACD

-0.59

Negative

RSI

37.86

Neutral

STOCH

72.39

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LUNG, the sentiment is Negative. The current price of 5.2 is below the 20-day moving average (MA) of 5.66, below the 50-day MA of 6.93, and below the 200-day MA of 6.85, indicating a bearish trend. The MACD of -0.59 indicates Negative momentum. The RSI at 37.86 is Neutral, neither overbought nor oversold. The STOCH value of 72.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LUNG.

Pulmonx Risk Analysis

Pulmonx disclosed 83 risk factors in its most recent earnings report. Pulmonx reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Pulmonx Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VMD	71 Outperform	$279.42M	25.74	9.19%	―	22.54%	8.55%
OM	54 Neutral	$179.83M	―	-170.97%	―	-12.80%	28.80%
TLSI	53 Neutral	$184.92M	―	271.41%	―	169.66%	28.89%
Sector *	51 Neutral	$5.32B	3.41	-40.36%	2.89%	17.93%	2.52%
LUNG	51 Neutral	$209.29M	―	-55.25%	―	22.01%	10.02%
INGN	49 Neutral	$195.74M	―	-18.95%	―	6.35%	65.58%
BVS	49 Neutral	$627.43M	―	-20.86%	―	11.89%	79.18%

* Healthcare Sector Average

Performance Comparison

LUNG

Pulmonx

5.20

-2.30

-30.67%

INGN

Inogen

7.28

0.26

3.70%

VMD

Viemed Healthcare

7.07

-1.15

-13.99%

Outset Medical

11.58

-27.87

-70.65%

TLSI

TriSalus Life Sciences

5.73

-3.63

-38.78%

BVS

Bioventus

7.65

3.58

87.96%

Pulmonx Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -21.69% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

Pulmonx demonstrated strong revenue growth and international expansion, with significant advancements in clinical trials and product innovation. However, increased operating expenses and persistent net losses highlight ongoing financial challenges. The future outlook includes strategic initiatives to sustain growth, but foreign exchange fluctuations pose a potential risk.

Highlights

Strong Revenue Growth

Pulmonx reported worldwide sales of $23.8 million in Q4 2024, reflecting 23% growth over the same period last year. Full year 2024 worldwide revenue was $83.8 million, representing 22% growth over 2023.

Record International Sales

Record international sales of $7.9 million in Q4 2024, representing 42% growth year-over-year. Strong performance in key European markets and successful expansion in China.

Expansion of U.S. Account Base

Expanded U.S. account base with 52 new centers in 2024, ending the year with 283 active accounts in Q4.

Notable Clinical Trials and Studies

Launched AeriSeal CONVERT II Pivotal Trial and Japanese post-market study. Demonstrated successful conversion of collateral ventilation status in 77.6% of patients in AeriSeal CONVERT Trial.

Innovation and Product Launches

Introduced LungTrax platform and new Chartis Precision Catheter. Launched first U.S. TV commercial reaching over 11 million people.

Positive Financial Metrics

Gross margin for fiscal year 2024 was 74%, consistent with 2023. Adjusted EBITDA loss improved by 10% in Q4 2024 and by 20% for the full year.

Lowlights

Operating Expenses Increase

Total operating expenses for Q4 2024 were $31 million, an increase of 9% over the prior year period. Full year operating expenses increased by 6% over 2023.

Net Loss Persistence

Net loss for Q4 2024 was $13.2 million, slightly improved from a loss of $13.9 million in the same period of the prior year. Full year net loss was $56.4 million, a 7% improvement over 2023.

Impact of Foreign Exchange Fluctuations

Anticipated negative impact of approximately 100 basis points on reported revenue for 2025 due to foreign exchange fluctuations.

Company Guidance

During the Pulmonx Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for 2025, emphasizing expected revenue growth between $96 million and $98 million, reflecting a 16% to 18% growth rate on a constant currency basis. The company anticipates gross margins to remain approximately 74%, improving in the second half due to higher production volumes, geographic mix, and cost optimization initiatives. Operating expenses for the year are projected to range from $133 million to $135 million, including $22 million in non-cash stock-based compensation. Pulmonx aims to scale its initiatives in the first half of 2025, driving a re-acceleration of U.S. growth in the second half, while strong international growth is expected in the first half, followed by typical seasonality. The company remains committed to sustainable long-term growth of at least 20%.

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.