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Novabay Pharmaceuticals (NBY)
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NovaBay Pharma (NBY) AI Stock Analysis

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NBY

NovaBay Pharma

(NYSE MKT:NBY)

Rating:51Neutral
Price Target:
$1.50
▼(-44.03% Downside)
NovaBay Pharma's overall stock score reflects significant financial challenges, with declining revenues and negative profit margins being the most impactful factors. While technical indicators show some bullish momentum, the valuation remains unattractive due to unprofitability. Positive corporate events, including a strategic shift and special dividend, provide some optimism for future prospects.
Positive Factors
Asset Sale
NovaBay accepted an increased offer of $11.5 million for its Avenova assets, which may benefit the company's financial position.
Business Strategy
The sale of DERMAdoctor should reduce its cash burn and allows it to focus on pursuing newer and stronger growth opportunities that are better aligned with its core eyecare business.
Negative Factors
Financial Performance
Net loss was $1.6 million or EPS of $(1.37) compared with our estimates of $(1.28) and consensus of $(1.23).
Investor Uncertainty
The company did not provide 2024 guidance, which creates uncertainty for investors.
Revenue Performance
Revenue was $2.4 million compared with our estimates of $2.8 million and consensus of $3.2 million.

NovaBay Pharma (NBY) vs. SPDR S&P 500 ETF (SPY)

NovaBay Pharma Business Overview & Revenue Model

Company DescriptionNovaBay Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing innovative anti-infective products for the eye care and wound care markets. The company leverages its proprietary technology platform, which includes its lead product, Avenova, a hypochlorous acid solution designed for eyelid and eyelash hygiene. NovaBay operates primarily in the healthcare sector, with a strong emphasis on addressing unmet medical needs in the prevention and treatment of infections.
How the Company Makes MoneyNovaBay Pharmaceuticals generates revenue primarily through the sale of its products, particularly Avenova, which is marketed to eye care professionals and consumers for the management of blepharitis and other eyelid conditions. The company also seeks to expand its revenue through strategic partnerships and collaborations with other healthcare firms, which may include licensing agreements and co-marketing arrangements. Additionally, NovaBay may explore opportunities to develop and commercialize new products based on its proprietary technology platform, further diversifying its revenue streams.

NovaBay Pharma Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2024)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook, with strong growth and efficiency improvements in the eyecare segment, but challenges in overall revenue and net loss due to declines in wound care sales and low cash reserves.
Q2-2024 Updates
Positive Updates
Eyecare Business Growth
Sales from eyecare products reached $4.8 million for the first half of 2024, showing growth in the eyecare segment driven by Avenova branded products.
Increase in Subscription Customers
The number of Avenova Subscribe & Save customers on Amazon increased by 123% since the beginning of 2022, 64% since the beginning of 2023, and 16% for the first 6 months of 2024.
Record Prime Day Sales
Avenova sales were 17% higher than Prime Day 2023 and 40% higher than Prime Day 2022.
Gross Margin Improvement
Gross margin on net product revenue for Q2 2024 was 66%, compared with 49% for Q2 2023, due to increased sales of higher-margin eyecare products.
Reduction in Marketing Expenses
Sales and marketing expenses for Q2 2024 declined 13% from the prior year, highlighting improved cost efficiency.
Negative Updates
Net Loss
Net loss attributable to common stockholders for Q2 2024 was $1.6 million, compared with a net loss of $4 million for Q2 2023.
Decline in Total Sales
Total sales net for Q2 2024 were $2.4 million, down from $3.5 million in Q2 2023, due to a decrease in wound care product sales.
Reduced Wound Care Revenue
No significant wound care product orders in 2024 compared to a large order in 2023, impacting overall sales volume.
Cash Position
Cash and cash equivalents as of June 30, 2024, were $0.8 million, indicating a need for careful financial management.
Company Guidance
During the NovaBay Pharmaceuticals Q2 2024 earnings call, the company reported a strong performance in its eyecare segment, with sales of eyecare products reaching $4.8 million for the first half of the year. They are on track to meet their annual target of $10 million in eyecare sales. The company has successfully reduced sales and marketing expenses by 13% year-over-year while achieving an 8% increase in eyecare revenue for Q2 2024, primarily through online OTC channels. Subscribe & Save customers on Amazon, their largest sales channel, grew by 16% in the first half of 2024, contributing to approximately 24% of online Avenova revenue. The gross margin improved to 66% in Q2 2024 from 49% in the prior year due to a shift towards higher-margin eyecare products. NovaBay's strategic focus remains on efficient growth within the U.S. dry eye market, anticipated to exceed $4.8 billion by 2030.

NovaBay Pharma Financial Statement Overview

Summary
NovaBay Pharma is facing significant financial challenges, with declining revenues, negative profit margins, and a deteriorating balance sheet. The cash flow situation is concerning, with negative free cash flow and limited financing activities, suggesting liquidity issues. The company needs to address its operational inefficiencies and explore financing options to stabilize its financial position.
Income Statement
35
Negative
NovaBay Pharma has experienced a decline in revenue from $14.73M in 2023 to $9.75M in 2024, indicating a negative revenue growth rate. The company shows a negative gross profit margin and net profit margin due to consistent net losses, with a net income of -$8.61M in 2024. EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.
Balance Sheet
20
Very Negative
NovaBay Pharma's balance sheet reveals financial instability with negative stockholders' equity in 2024, indicating liabilities exceed assets. The debt-to-equity ratio is not meaningful due to negative equity. A low equity ratio reflects poor asset financing and potential financial distress.
Cash Flow
30
Negative
The cash flow statement shows a negative free cash flow of -$5.19M in 2024, with no growth compared to 2023. Operating cash flow is negative, exceeding net income, indicating challenges in generating cash from operations. The company has also seen no significant financing activities, limiting its ability to raise funds.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.75M9.78M10.46M14.40M8.42M9.93M
Gross Profit3.00M6.48M6.08M7.78M5.64M5.96M
EBITDA-7.38M-5.92M-4.80M-7.20M-8.74M-6.38M
Net Income3.32M-7.22M-9.64M-16.27M-6.56M-11.04M
Balance Sheet
Total Assets6.91M3.42M9.03M16.40M23.98M15.24M
Cash, Cash Equivalents and Short-Term Investments5.34M430.00K3.13M5.36M7.50M11.95M
Total Debt1.04M1.67M2.74M2.04M551.00K503.00K
Total Liabilities2.67M3.55M5.72M5.84M13.81M2.92M
Stockholders Equity4.25M-129.00K3.31M10.55M10.17M12.32M
Cash Flow
Free Cash Flow-7.24M-5.19M-4.15M-6.77M-9.24M-4.75M
Operating Cash Flow-7.23M-5.18M-4.13M-6.65M-9.19M-4.72M
Investing Cash Flow-1.07M1.06M-19.00K-112.00K-12.04M-26.00K
Financing Cash Flow707.00K1.50M1.91M4.63M16.79M9.76M

NovaBay Pharma Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.68
Price Trends
50DMA
0.79
Positive
100DMA
0.69
Positive
200DMA
0.66
Positive
Market Momentum
MACD
0.39
Negative
RSI
92.31
Negative
STOCH
86.66
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBY, the sentiment is Positive. The current price of 2.68 is above the 20-day moving average (MA) of 1.04, above the 50-day MA of 0.79, and above the 200-day MA of 0.66, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 92.31 is Negative, neither overbought nor oversold. The STOCH value of 86.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NBY.

NovaBay Pharma Risk Analysis

NovaBay Pharma disclosed 26 risk factors in its most recent earnings report. NovaBay Pharma 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

NovaBay Pharma Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
51
Neutral
$7.89B-0.33-41.61%2.23%23.26%-2.03%
51
Neutral
$10.37M-431.59%-60.49%96.12%
46
Neutral
$17.37M-321.37%4455.07%77.31%
41
Neutral
$3.54M-296.91%15.95%92.33%
39
Underperform
$13.29M-402.19%59.81%
$1.32M-79.71%
39
Underperform
$5.79M-285.78%120.67%-456.33%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NBY
NovaBay Pharma
2.68
2.20
458.33%
SNGX
Soligenix
3.08
-0.99
-24.32%
JAGX
Jaguar Animal Health
1.68
-26.32
-94.00%
EVAX
Evaxion Biotech
2.59
-14.46
-84.81%
SPRC
SciSparc Ltd.
2.21
-4.71
-68.06%
SXTP
60 Degrees Pharmaceuticals, Inc.
1.46
-5.39
-78.69%

NovaBay Pharma Corporate Events

Private Placements and FinancingDividends
NovaBay Pharma Announces Special Cash Dividend
Positive
Aug 26, 2025

On August 26, 2025, NovaBay Pharmaceuticals announced a special cash dividend of $0.80 per share, payable on September 29, 2025, to stockholders of record as of September 15, 2025. This decision follows an investment agreement with David E. Lazar, who has committed up to $6 million in exchange for preferred stock. The dividend aims to maximize shareholder value after the sale of NovaBay’s eye care products to PRN Physician Recommended Nutriceuticals, LLC earlier in the year. The NYSE American has advised that the company’s stock will trade with ‘due bills’ during the dividend right period, affecting stockholders who sell their shares during this time.

Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and Strategy
NovaBay Pharma Appoints New CEO Amid Strategic Shift
Positive
Aug 19, 2025

NovaBay Pharmaceuticals announced a significant strategic shift following the sale of its eyecare products. On August 19, 2025, the company entered into a $6 million securities purchase agreement with investor David E. Lazar, who was appointed as the new CEO. This move, which includes issuing non-voting convertible preferred stock, is aimed at maintaining NovaBay’s public listing and exploring strategic investment opportunities, rather than pursuing liquidation. The transaction is expected to provide funds for future acquisitions and a special cash dividend for stockholders, marking a new direction for the company.

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.Date of analysis: Aug 28, 2025