Precipio (PRPO) AI Stock Analysis

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Precipio

(NASDAQ:PRPO)

39Underperform

Precipio's stock is hindered by financial instability, particularly highlighted by negative profit margins and a weak balance sheet. Technical indicators suggest a bearish trend, and valuation metrics are unfavorable due to ongoing losses. However, recent earnings call insights provide some optimism with positive cash flow and revenue growth in the pathology division. Continued focus on overcoming regulatory challenges and improving financial health is essential for future performance.

Precipio (PRPO) vs. S&P 500 (SPY)

Market Cap

$7.88M

Dividend YieldN/A

Average Volume (3M)8.61K

Price to Earnings (P/E)―

Beta (1Y)0.50

Revenue Growth21.95%

EPS Growth39.43%

CountryUS

Employees54

SectorHealthcare

Sector Strength66

IndustryMedical - Diagnostics & Research

Share Statistics

EPS (TTM)-2.96

Shares Outstanding1,504,312

10 Day Avg. Volume18,406

30 Day Avg. Volume8,609

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.58

Price to Cash Flow (P/CF)25.10

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 TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Precipio Business Overview & Revenue Model

Company DescriptionPrecipio, Inc. is a healthcare solutions company focused on cancer diagnostics. It operates within the biotechnology and healthcare sectors, offering a range of diagnostic products and services designed to improve the accuracy and efficiency of cancer diagnosis. The company's core products include specialty diagnostic tests that target hematologic cancers and solid tumors, providing advanced insights to healthcare providers and laboratories.

How the Company Makes MoneyPrecipio makes money primarily through the sale of its proprietary diagnostic tests and services to clinical laboratories, hospitals, and other healthcare providers. The company generates revenue by charging fees for the administration and analysis of its cancer diagnostic tests. It also earns income through strategic partnerships and collaborations with other healthcare organizations, which may include co-development agreements or licensing of its technologies. Additionally, Precipio benefits from its own laboratory services, where it processes tests and provides diagnostic results to its clients. These revenue streams contribute to the company's financial performance by leveraging its innovative diagnostic solutions in the growing field of precision medicine.

Precipio Financial Statement Overview

Summary

Precipio shows strong revenue growth and improvement in gross profit margin. However, persistent negative net profit margins, weak balance sheet with zero equity, and cash flow inefficiencies highlight significant financial challenges.

Income Statement

Neutral

Precipio has demonstrated a consistent increase in total revenue, growing from $3.13M in 2019 to $15.97M in 2024, indicating a strong upward trajectory in sales. The gross profit margin has improved over time, reaching approximately 47.34% in 2024, up from 7.01% in 2019. However, the company continues to face challenges with negative net profit margins, reflecting ongoing net losses. EBIT and EBITDA margins are also negative, stressing the need for improved cost management and operational efficiency.

Balance Sheet

Very Negative

The company's balance sheet shows significant weaknesses, particularly with zero stockholders' equity in 2024, indicating high financial risk. Although total liabilities have been reduced to zero in 2024, the absence of equity suggests a lack of financial stability. The historical debt-to-equity ratio is concerning, as is the diminished equity ratio over the years. The lack of equity raises concerns about the company's ability to secure financing and sustain operations.

Cash Flow

Negative

Precipio has shown some improvement in cash flow, with free cash flow turning positive in 2024 at $216K after being negative in previous years. Operating cash flow improved significantly from -$3.56M in 2023 to $439K in 2024. However, the operating cash flow to net income ratio indicates inefficiencies, as net income remains negative. The company must focus on enhancing cash generation capabilities to ensure long-term sustainability.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
16.80M	15.96M	15.20M	9.41M	8.85M	6.09M
	Gross Profit
6.26M	7.56M	6.02M	2.51M	2.39M	1.15M
	EBIT
-4.73M	-4.22M	-7.62M	-12.80M	-9.61M	-9.15M
	EBITDA
-1.85M	-4.22M	-4.32M	-10.65M	-7.05M	-8.77M
	Net Income Common Stockholders
-3.00M	-4.29M	-5.85M	-12.20M	-8.55M	-12.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.90M	3.45M	1.50M	3.44M	11.67M	2.66M
	Total Assets
16.22M	3.45M	18.10M	21.50M	30.44M	20.71M
	Total Debt
4.46M	0.00	1.12M	1.39M	1.43M	1.49M
	Net Debt
-1.44M	-3.45M	-386.00K	-2.05M	-10.24M	-1.17M
	Total Liabilities
5.07M	0.00	3.67M	5.14M	5.83M	6.55M
	Stockholders Equity
11.15M	0.00	14.43M	16.30M	24.56M	14.13M
Cash Flow		Free Cash Flow
-240.00K	216.00K	-3.69M	-8.00M	-7.26M	-7.58M
	Operating Cash Flow
-12.00K	439.00K	-3.56M	-7.72M	-6.58M	-7.43M
	Investing Cash Flow
-228.00K	-223.00K	-126.00K	-277.00K	-682.00K	-96.00K
	Financing Cash Flow
-269.00K	-329.00K	1.74M	-225.00K	16.27M	9.34M

Precipio Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.24

Price Trends

50DMA

6.76

Negative

100DMA

6.39

Negative

200DMA

6.21

Negative

Market Momentum

MACD

-0.34

Negative

RSI

43.64

Neutral

STOCH

72.33

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRPO, the sentiment is Negative. The current price of 5.24 is below the 20-day moving average (MA) of 5.69, below the 50-day MA of 6.76, and below the 200-day MA of 6.21, indicating a bearish trend. The MACD of -0.34 indicates Negative momentum. The RSI at 43.64 is Neutral, neither overbought nor oversold. The STOCH value of 72.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRPO.

Precipio Risk Analysis

Precipio disclosed 62 risk factors in its most recent earnings report. Precipio 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

Precipio Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KPRX	56 Neutral	$8.61M	4.06	22.56%	―	―	―
Sector *	50 Neutral	$5.14B	3.10	-40.94%	2.95%	17.94%	2.00%
NURO	44 Neutral	$8.90M	―	-45.38%	―	-48.61%	32.18%
LYRA	42 Neutral	$5.75M	―	-184.99%	―	-1.54%	-7.20%
ACXP	39 Underperform	$8.26M	―	-534.03%	―	―	23.65%
PRPO	39 Underperform	$7.88M	―	-32.35%	―	21.95%	39.43%

* Healthcare Sector Average

Performance Comparison

PRPO

Precipio

5.45

-0.70

-11.38%

NURO

Neurometrix

4.35

-0.09

-2.03%

KPRX

Kiora Pharmaceuticals

3.02

-2.20

-42.15%

LYRA

Lyra Therapeutics

0.09

-5.12

-98.27%

ACXP

Acurx Pharmaceuticals

0.37

-1.67

-81.86%

Precipio Earnings Call Summary

Earnings Call Date: Mar 31, 2025 | % Change Since: -16.43% | Next Earnings Date: May 14, 2025

Earnings Call Sentiment Neutral

Precipio ended 2024 with significant achievements in financial stability, including reaching breakeven and achieving positive cash flow. However, the company faced challenges in the products division due to regulatory and operational hurdles, affecting revenue growth. The reorganization and leadership changes aim to address these issues and drive future growth.

Highlights

Achieving Breakeven and Profitability

In Q4 2024, Precipio achieved positive adjusted EBITDA and positive cash flow, indicating a significant milestone towards profitability with a strong cash reserve and growth pipeline.

Revenue Growth

Precipio reported a revenue growth of nearly 26% in Q4 2024 compared to the previous year and a full-year revenue growth of close to 22%.

Pathology Division Performance

For the second consecutive quarter, pathology revenues exceeded the breakeven point of $1.3 million per month, with a target to reach a $25 million run rate by the end of 2025.

New Leadership in Products Division

Steve Miller rejoined as Chief Commercial Officer to drive growth in the products division, focusing on both direct sales and enhancing collaboration with distribution partners.

Lowlights

Stagnant Product Division Revenue

Q4 revenues for the product division remained stagnant at $700,000, the same as Q3, due to various onboarding and regulatory challenges.

Regulatory and Operational Challenges

The products division faced delays due to new regulatory requirements, lab process challenges, and staffing issues at customer sites, impacting revenue timing.

Company Guidance

In the Q4 and Year-End 2024 Shareholder Update Conference Call, Precipio's CEO Ilan Danieli announced several key financial achievements and strategic goals for the company. During the fourth quarter, the company achieved positive adjusted EBITDA and positive cash flow, marking a significant milestone towards profitability. Revenue growth was reported at 26% for Q4 and 22% for the full year, with the pathology division surpassing its breakeven point of $1.3 million per month for the second consecutive quarter. The company aims to reach a $25 million run rate in the pathology division by the end of 2025. Despite Q4 product division revenues remaining flat at $700,000 compared to Q3, the company anticipates future growth through improved onboarding processes and addressing challenges such as regulatory changes and lab workflow adjustments. Precipio also detailed a revitalized distribution strategy, expecting a shift towards increased revenue through distributor networks. Additionally, the company plans to enhance market visibility and investor engagement, with a focus on providing management guidance on key financial metrics such as revenue and EBITDA as stability in revenue is achieved.

Precipio Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Precipio Adopts Performance-Based Stock Options for 2025

Positive

Jan 16, 2025

On January 16, 2025, Precipio, Inc. announced a shift in its employee compensation strategy, offering senior management performance-based stock options instead of traditional time-vested options for 2025. These options will vest only if the company’s stock price reaches five times the exercise price of $6.06, reflecting management’s confidence in the company’s growth potential. The decision aims to align management’s interests with company performance, with the entire senior management opting for the performance-based structure, signaling optimism about future share price growth.

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.