Spectral AI (MDAI) AI Stock Analysis

• Market Cap: $33.06M
• Dividend Yield: N/A
• Average Volume (3M): 350.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.47
• Revenue Growth: 238.96%
• EPS Growth: 35.96%
• Country: US
• Employees: 78
• Sector: Healthcare
• Sector Strength: 58
• Industry: Medical - Devices
• EPS (TTM): -0.85
• Shares Outstanding: 25,628,120
• 10 Day Avg. Volume: 149,493
• 30 Day Avg. Volume: 350,457
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.60
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.70
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.17
• Price Target Upside: 223.26% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Spectral AI shows significant revenue growth and strategic technological developments, yet faces substantial financial challenges with negative profitability and high leverage. Technical indicators suggest bearish momentum, and the valuation appears unattractive due to the negative P/E ratio. The earnings call presents a mixed outlook, highlighting achievements but also projecting revenue declines, contributing to a cautious overall assessment.

Positive Factors

Clinical Data

Positive clinical data supports regulatory submission; reiterate Buy.

Financial Performance

Spectral AI reported revenues of $8.2M for 3Q24, which is higher than the estimated $7.1M.

Regulatory Progress

The company is on track to submit the 510(k) de novo application to FDA to market the DeepView system, potentially launching in the US market in 2026.

Negative Factors

Operational Risks

Risks include clinical, competition, regulatory, commercial, legal and intellectual property, manufacturing, and dilution.

Regulatory Challenges

The intention to include positive data as part of regulatory submission to the FDA indicates progress towards FDA approval.

Revenue Guidance

Management provided 2025 revenue guidance of approximately $21.5M, an expected decrease from 2024, as the company intends to focus its efforts primarily on obtaining regulatory approval.

Spectral AI Business Overview & Revenue Model

Company Description

Spectral AI, Inc. operates as an artificial intelligence (AI) company. The company focuses on medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView, a predictive diagnostic device that offers clinicians an objective and immediate assessment of a wound's healing potential prior to treatment or other medical intervention. The company is based in Dallas, Texas.

How the Company Makes Money

Spectral AI generates revenue primarily through the sale and licensing of its DeepView Wound Imaging System to healthcare providers and institutions. The company may also engage in strategic partnerships with medical device manufacturers and healthcare organizations to expand the reach and adoption of its technology. Additionally, Spectral AI may receive funding from research grants and collaborations with government and private entities interested in advancing AI-driven medical solutions. The company's ability to commercialize its technology and secure long-term contracts with healthcare providers is a significant factor contributing to its earnings.

Spectral AI Financial Statement Overview

Summary

Spectral AI shows strong revenue growth but faces significant challenges in profitability and financial stability. High leverage, negative equity, and ongoing cash burn are critical concerns that need to be addressed for future sustainability.

Income Statement

Spectral AI exhibits strong revenue growth with a TTM revenue of $27.26M, up from $18.06M in 2023, indicating a growth rate of 51%. However, the company faces profitability challenges, as evidenced by negative net and EBIT margins. The TTM net income stands at -$11.12M, reflecting a substantial loss, though improved from the previous year's -$20.85M.

Balance Sheet

The balance sheet reveals high leverage with a negative stockholders' equity of -$4.34M, leading to a concerning debt-to-equity ratio. The equity ratio is also negative, highlighting financial instability. The company's total assets have increased, but liabilities surpass assets, posing a risk.

Cash Flow

Cash flow analysis shows negative free cash flow of -$12.04M, though slightly better than the previous year. The operating cash flow is also negative, indicating ongoing cash burn. Despite financing inflows, the cash flow situation remains challenging.

Breakdown
Dec 2023	Dec 2022	Dec 2021
Income Statement		Total Revenue
18.06M	25.37M	15.24M
	Gross Profit
7.88M	10.84M	7.05M
	EBIT
-12.98M	-2.65M	-4.18M
	EBITDA
-12.26M	-2.08M	-4.18M
	Net Income Common Stockholders
-20.85M	-2.91M	-3.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.79M	14.17M	16.12M
	Total Assets
10.69M	18.72M	18.54M
	Total Debt
1.29M	1.20M	583.00K
	Net Debt
-3.50M	-12.97M	-15.54M
	Total Liabilities
12.40M	6.72M	4.79M
	Stockholders Equity
-1.71M	12.00M	13.75M
Cash Flow		Free Cash Flow
-13.24M	-1.16M	-2.92M
	Operating Cash Flow
-13.24M	-1.16M	-2.92M
	Investing Cash Flow
0.00	0.00	-7.00K
	Financing Cash Flow
3.84M	-785.00K	13.92M

Spectral AI Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MDAI, the sentiment is Negative. The current price of 1.29 is above the 20-day moving average (MA) of 1.24, below the 50-day MA of 1.41, and below the 200-day MA of 1.59, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 45.97 is Neutral, neither overbought nor oversold. The STOCH value of 68.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MDAI.

Spectral AI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ICAD	60 Neutral	$93.86M	―	-18.09%	―	-4.15%	3.49%
Sector *	52 Neutral	$5.36B	3.88	-42.93%	2.87%	17.85%	1.45%
NMTC	46 Neutral	$29.28M	―	-195.50%	―	210.76%	61.22%
HYPR	45 Neutral	$56.82M	―	-61.03%	―	16.84%	9.43%
MDAI	45 Neutral	$33.06M	―	256.43%	―	238.96%	35.96%
RBOT	39 Underperform	$47.15M	―	-87.40%	―	―	-1455.58%

Spectral AI Corporate Events

Spectral AI Enhances CFO Compensation Amidst Growth

On March 26, 2025, Spectral AI’s Board of Directors approved an amendment to CFO Vincent Capone’s employment agreement, enhancing his compensation and stock options. The company announced its 2024 financial results, highlighting a significant increase in R&D revenue due to its BARDA PBS contract. Spectral AI is advancing its DeepView System for regulatory approval in the US, supported by successful burn validation study results. The company is on track to submit regulatory filings for its burn indication and anticipates FDA clearance in early 2026, with commercial product revenue expected in the second half of 2025.

Spectral AI Secures $15M Financing for U.S. Expansion

On March 21, 2025, Spectral AI, Inc. completed a securities purchase agreement and a debt financing transaction, raising a total of $2.7 million from equity financing and securing up to $15 million in debt financing from Avenue Venture Opportunities Fund II, L.P. The funds will support the commercialization of its DeepView System in the U.S. market. The financing includes an initial draw of $8.5 million and potential additional debt contingent upon FDA clearance and further equity raise. This financial boost is expected to accelerate Spectral AI’s market entry and enhance its operational capabilities, positioning the company for growth and innovation in the medical diagnostics industry.

Spectral AI Announces Successful Burn Study Results

On March 17, 2025, Spectral AI announced the successful results of its Burn Validation Study for the DeepView System, which uses multi-spectral imaging and AI algorithms to predict burn healing potential. The study, conducted from January 2024 to March 2025, involved 164 patients and demonstrated that the DeepView System significantly outperformed burn physicians in identifying non-healing tissue. With plans to submit these results to the FDA by mid-2025, Spectral AI aims for De Novo Clearance and rapid commercialization, potentially transforming burn care by providing faster and more accurate treatment insights.