Nephros (NEPH) AI Stock Analysis

• Market Cap: $40.06M
• Dividend Yield: N/A
• Average Volume (3M): 75.62K
• Price to Earnings (P/E): 28.2
• Beta (1Y): -0.52
• Revenue Growth: 32.36%
• EPS Growth: N/A
• Country: US
• Employees: 31
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 0.03
• Shares Outstanding: 10,626,683
• 10 Day Avg. Volume: 107,933
• 30 Day Avg. Volume: 75,620
• PEG Ratio: -2.00
• Price to Book (P/B): 1.80
• Price to Sales (P/S): 1.09
• P/FCF Ratio: -28.29
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 2.19
• Enterprise Value/Gross Profit: 3.47
• Enterprise Value/Ebitda: 23.78
• 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: 71 Outperform
• Price Target: $5.50 ▲(9.78% Upside)
• Action: Upgraded Date: 01/21/26
• Date: Action: Upgraded 01/21/26

The score is driven primarily by the improving financial performance and a strong, upbeat earnings call (accelerating revenue growth, sustained profitability, improving cash flow, and low leverage). These positives are tempered by a relatively high P/E with no dividend support and only modest/neutral technical momentum.

Positive Factors

Sustained profitability

Achieving five consecutive profitable quarters demonstrates the business model can generate consistent earnings, reducing reliance on external financing. Sustained profitability improves capacity to reinvest in R&D, scale sales, and absorb cyclical downturns, materially strengthening long-term resilience.

Strong cash generation & low leverage

Positive operating and free cash flow combined with minimal debt provide financial flexibility to fund growth initiatives, weather demand volatility, and negotiate partnerships. This cash strength supports durable operations and reduces refinancing risk over the medium term.

Product & market expansion (PFAS, Medica deal)

Strategic product innovation (PFAS removal) and an exclusive licensing deal with Medica broaden addressable markets beyond dialysis into municipalities and labs. These structural moves diversify revenue streams and create durable channels for recurring consumable sales and scale.

Negative Factors

Historical earnings volatility

Although recent results improved, the company has prior multi-year losses and uneven cash flow. That track record implies execution and demand sensitivity risks remain, meaning future profitability could reverse if growth slows or one-time benefits fade.

Relatively thin margins

Modest operating and net margins limit the firm's ability to absorb cost inflation, tariffs, or competitive pricing pressure. Lower margin buffers restrict reinvestment capacity and make earnings more sensitive to cost swings, raising execution risk over 2–6 months.

Rising opex and tariff pressure

Increasing R&D and SG&A, plus tariff-driven inventory handling costs, compress margins and raise the breakeven required for profitable growth. If operating expenses remain elevated or tariffs persist, cash generation and margin sustainability could be impaired long term.

Nephros Business Overview & Revenue Model

Company Description

Nephros, Inc. develops and sells high performance water solutions to the medical and commercial markets in the United States. The company operates in three segments: Water Filtration, Pathogen Detection, and Renal Products. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also develops and sells real-time water testing systems to provide actionable data on waterborne pathogens; and medical device products for patients with renal disease, including a 2nd generation hemodiafiltration system for the treatment of patients with end stage renal disease. In addition, it offers water filters that improve the taste and odor of water, as well as reduce biofilm, bacteria, and scale build-up in downstream equipment under the Nephros and AETHER brands for the food service, hospitality, convenience store, and health care markets. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.

How the Company Makes Money

Nephros generates revenue through the sale of its proprietary products, which include water filtration systems and dialysis-related devices. The company's revenue model is based on direct sales to hospitals, dialysis centers, and healthcare providers, as well as recurring revenue from consumables associated with its filtration systems. Key revenue streams include the sale of both capital equipment and ongoing consumable products, contributing to a steady income flow. Additionally, partnerships with healthcare institutions and collaborations with other medical device manufacturers play a significant role in expanding its market reach and driving sales.

Nephros Financial Statement Overview

Summary

Financials show a clear TTM turnaround: improving revenue growth, restored profitability (positive operating and net margins), stronger free cash flow, and conservative leverage. The main risk is durability given the history of losses and uneven cash flow in recent years.

Income Statement

Profitability has improved meaningfully versus prior years, with TTM (Trailing-Twelve-Months) showing solid gross margin (~63%) and a return to healthy operating and net profitability (about 6.6% operating margin and 8.3% net margin). Revenue growth is positive in TTM (about +7.5%), a notable re-acceleration after a roughly flat 2024. The main weakness is that profitability is still relatively thin for the industry after several loss-making years (2020–2023), so results could be more sensitive to cost pressure or demand softness.

Balance Sheet

Leverage looks conservative, with low debt relative to equity in TTM (debt-to-equity ~0.12), supporting financial flexibility. Equity has grown from 2023 to TTM, and returns on equity improved sharply to ~15.8% in TTM after being minimal in 2024 and negative in 2022–2023. The key watch item is the company’s historically volatile earnings profile, which can quickly swing reported returns even with a clean capital structure.

Cash Flow

Cash generation strengthened significantly in TTM (Trailing-Twelve-Months), with positive operating cash flow (~$2.7M) and positive free cash flow (~$2.7M), a major turnaround from negative free cash flow in 2024 and 2022. Free cash flow growth is strong in TTM (about +36%), and cash conversion appears solid with free cash flow roughly matching net income in TTM. The primary weakness is historical inconsistency—cash flow was negative as recently as 2024—so durability through different demand conditions remains the key question.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.93M	14.16M	14.24M	9.97M	10.22M	8.56M
Gross Profit	11.34M	8.72M	8.40M	4.73M	5.63M	4.91M
EBITDA	1.65M	227.00K	-1.36M	-3.69M	-2.49M	-4.21M
Net Income	1.48M	74.00K	-1.57M	-7.38M	-4.11M	-4.77M
Balance Sheet
Total Assets	13.25M	11.21M	11.86M	11.00M	17.65M	18.51M
Cash, Cash Equivalents and Short-Term Investments	5.17M	3.76M	4.31M	3.63M	6.97M	8.25M
Total Debt	1.15M	1.41M	1.84M	1.09M	1.00M	2.17M
Total Liabilities	3.24M	2.63M	3.50M	2.12M	2.90M	2.94M
Stockholders Equity	10.01M	8.59M	8.36M	5.59M	11.70M	12.52M
Cash Flow
Free Cash Flow	2.72M	-547.00K	752.00K	-3.37M	-1.45M	-7.14M
Operating Cash Flow	2.72M	-492.00K	827.00K	-3.23M	-1.42M	-6.90M
Investing Cash Flow	0.00	-50.00K	-75.00K	-137.00K	-85.00K	-239.00K
Financing Cash Flow	-5.00K	-5.00K	-79.00K	34.00K	237.00K	11.22M

Nephros Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.01
• 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 NEPH, the sentiment is Negative. The current price of 5.01 is above the 20-day moving average (MA) of 4.15, above the 50-day MA of 4.58, and above the 200-day MA of 4.23, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 47.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEPH.

Nephros Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEPH	71 Outperform	$40.06M	28.17	16.29%	―	32.36%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
HBIO	48 Neutral	$26.52M	-0.48	-135.62%	―	-10.60%	-271.93%
RVP	48 Neutral	$20.36M	-3.08	-8.05%	―	-0.95%	58.17%
MLSS	42 Neutral	$20.93M	-3.20	-136.47%	―	0.59%	-39.76%
FEMY	41 Neutral	$31.44M	―	-376.23%	―	63.53%	12.49%

Nephros Corporate Events

Nephros Enters New License Agreement with Medica

On November 21, 2025, Nephros, Inc. entered into a new license and supply agreement with Medica S.p.A. to market and sell filtration products based on Medica’s ultrafiltration technology, replacing a prior agreement from December 2023. This agreement, effective through December 31, 2030, involves exclusive licensing rights, minimum annual purchase commitments, and mutual termination clauses, potentially impacting Nephros’s market positioning and operational strategy.

The most recent analyst rating on (NEPH) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Nephros stock, see the NEPH Stock Forecast page.