Avita Medical (RCEL) AI Stock Analysis

• Market Cap: $121.38M
• Dividend Yield: N/A
• Average Volume (3M): 401.03K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.90
• Revenue Growth: 38.32%
• EPS Growth: -1.31%
• Country: US
• Employees: 260
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Devices
• EPS (TTM): -0.38
• Shares Outstanding: 26,618,935
• 10 Day Avg. Volume: 465,274
• 30 Day Avg. Volume: 401,028
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 2.25
• Enterprise Value/Gross Profit: 2.67
• Enterprise Value/Ebitda: -3.77
• 1Y Price Target: $9.50
• Price Target Upside: 109.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 42 Neutral
• Price Target: $4.50 ▼(-0.66% Downside)

Avita Medical's overall stock score is primarily impacted by its financial instability, with negative equity and ongoing losses being major concerns. Technical indicators suggest weak momentum, and the valuation is unattractive due to a negative P/E ratio. While the earnings call and corporate events provide some positive outlook, they are insufficient to significantly improve the overall score.

Positive Factors

Market Potential

Avita's expanded portfolio of wound care solutions drastically increases its total addressable market potential to over $3.5B.

New Products

Early indicators from the launches of RECELL Go mini and Cohealyx suggest that these products will meaningfully contribute to revenue growth throughout 2025.

Product Portfolio Expansion

Avita is transforming from a single-product burn-focused company into a dynamic player in the wound care space, allowing it to treat a range of injuries.

Negative Factors

Cash Position

RCEL has limited cash on hand and a current operating cash burn, increasing downside risk.

Financial Guidance

RCEL pushed back its timelines to free cash flow break-even and GAAP profitability, indicating further financial struggles.

Reimbursement Issues

Reimbursement to providers via Medicare Administrative Contractors were not being paid despite submitting claims for usage.

Avita Medical Business Overview & Revenue Model

Company Description

AVITA Medical Inc. operates as a commercial-stage regenerative tissue company in the United States, Australia, and the United Kingdom. It offers regenerative products to address unmet medical needs in burn injuries, trauma injuries, chronic wounds, and dermatological and aesthetics indications, including vitiligo. The company's patented and proprietary platform technology provides treatment solutions derived from the regenerative properties of a patient's own skin. Its lead product is RECELL System, a device that enables healthcare professionals to produce a suspension of Spray-On Skin cells using a small sample of the patient's own skin for use in the treatment of acute thermal burns in patients eighteen years and older. The company has a research collaboration with the University of Colorado School of Medicine to establish pre-clinical proof-of-concept for a spray-on treatment of genetically corrected cells; and a research collaboration with Houston Methodist Research Institute to explore molecular reversal of cellular aging through a novel cell suspension delivery system. The company was formerly known as AVITA Therapeutics, Inc. and changed its name to AVITA Medical Inc. in December 2020. AVITA Medical Inc. was incorporated in 2000 and is based in Valencia, California.

How the Company Makes Money

Avita Medical generates revenue primarily through the sale of its RECELL System and related consumables used in the preparation and application of regenerative skin treatments. The company has established partnerships with healthcare providers and hospitals, facilitating the adoption of its technology in clinical settings. Revenue is also supported by ongoing clinical trials and studies that enhance the credibility of its products, potentially leading to new market opportunities. Additionally, Avita may benefit from reimbursement strategies with insurance companies, allowing patients to access its therapies, which further drives sales.

Avita Medical Financial Statement Overview

Summary

Avita Medical's financial performance is marred by significant profitability issues and high leverage. Despite a strong gross margin, the deep negative net profit margin and high debt levels pose considerable risks. The company's negative cash flow metrics further highlight the challenges in achieving financial stability.

Income Statement

Avita Medical's TTM revenue growth of 19.7% shows positive momentum, but the company faces challenges with negative profitability metrics. The gross profit margin is strong at 85.7%, indicating effective cost management in production. However, the net profit margin remains deeply negative at -95.5%, with both EBIT and EBITDA margins also negative, reflecting significant operational and financial losses.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.73, indicating significant leverage and potential financial risk. The equity ratio stands at 15.1%, suggesting limited equity support relative to total assets. The return on equity is negative at -468.8%, driven by substantial net losses, highlighting challenges in generating returns for shareholders.

Cash Flow

The cash flow analysis shows negative free cash flow growth and operating cash flow, which is concerning. The operating cash flow to net income ratio stands at 0.90, suggesting inefficiencies in converting revenue into cash. Additionally, the free cash flow to net income ratio is 1.04, reflecting the company's continued struggles with cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2022	Dec 2020	Dec 2019	Dec 2017
Income Statement
Total Revenue	74.88M	64.25M	50.56M	14.26M	20.67M	1.26M
Gross Profit	63.11M	55.16M	41.69M	11.29M	16.36M	517.47K
EBITDA	-44.63M	-55.34M	-39.57M	-41.53M	-61.17M	-18.55M
Net Income	-51.57M	-61.84M	-39.17M	-42.03M	-60.90M	-17.21M
Balance Sheet
Total Assets	58.13M	79.71M	144.34M	82.46M	119.49M	23.00M
Cash, Cash Equivalents and Short-Term Investments	15.69M	35.88M	116.55M	73.64M	106.70M	14.82M
Total Debt	44.59M	45.98M	449.48K	1.92M	2.78M	134.25K
Total Liabilities	71.03M	75.21M	19.87M	10.06M	14.58M	4.01M
Stockholders Equity	-12.89M	4.50M	124.47M	72.40M	104.91M	18.99M
Cash Flow
Free Cash Flow	-42.04M	-58.27M	-19.61M	-27.07M	-23.59M	-18.00M
Operating Cash Flow	-35.83M	-48.94M	-19.09M	-25.90M	-22.75M	-17.51M
Investing Cash Flow	27.65M	37.36M	-19.33M	-1.17M	-847.00K	-493.15K
Financing Cash Flow	2.95M	3.51M	900.00K	64.05M	77.06M	28.77M

Avita Medical Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCEL, the sentiment is Negative. The current price of 4.53 is below the 20-day moving average (MA) of 5.10, below the 50-day MA of 5.31, and below the 200-day MA of 8.50, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 39.26 is Neutral, neither overbought nor oversold. The STOCH value of 5.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RCEL.

Avita Medical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZIMV	67 Neutral	$534.97M	―	-4.76%	―	-19.52%	94.65%
INGN	60 Neutral	$216.05M	―	-13.46%	―	5.15%	73.29%
SNWV	54 Neutral	$359.77M	―	0.65%	―	57.43%	-155.29%
Sector *	51 Neutral	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%
TLSI	47 Neutral	$254.32M	―	271.41%	―	45.50%	53.07%
LUNG	44 Neutral	$72.12M	―	-66.88%	―	18.24%	4.81%
RCEL	42 Neutral	$121.38M	―	-935.73%	―	38.32%	-1.31%

Avita Medical Corporate Events

Avita Medical Announces $15M Equity Placement Agreement

On August 12, 2025, AVITA Medical, Inc. entered into a placement agreement with MST Financial Services Pty Limited to offer 17,201,886 CHESS Depositary Interests to Australian institutional and professional investors. The placement is expected to raise approximately US$15 million and close on or about August 19, 2025, with the securities being exempt from registration under the Securities Act of 1933.

Avita Medical Raises $15M in Private Placement

On August 12, 2025, AVITA Medical announced the successful completion of a private placement in Australia, raising approximately US$15 million through the issuance of 17.2 million new CHESS Depositary Interests (CDIs) on the ASX. The proceeds will be used for working capital and strategic growth, with the company expecting to achieve free cash flow by 2026. This move reflects strong investor confidence in AVITA’s strategy and its acute wound care portfolio, further solidifying its market position.

Avita Medical Amends Credit Agreement with OrbiMed

On August 7, 2025, AVITA Medical announced a fifth amendment to its credit agreement with OrbiMed Advisors, adjusting revenue covenants and issuing common stock to the lenders. Despite facing challenges due to a temporary gap in Medicare payments, AVITA reported a 21% increase in commercial revenue for Q2 2025 compared to the previous year. The company anticipates recovery in RECELL demand in the second half of 2025 and has revised its full-year revenue guidance to reflect these developments.

Avita Medical Appoints Dr. Michael Tarnoff to Board

On August 6, 2025, AVITA Medical announced the appointment of Dr. Michael Tarnoff to its Board of Directors, highlighting his extensive leadership experience in medical innovation. This strategic move aims to bolster AVITA’s focus on advancing patient-centric wound-healing technologies and expanding its presence in hospitals and trauma care settings. Additionally, Cary Vance has been elected as the new Board Chair, succeeding Lou Panaccio, who was thanked for his decade-long service. These changes reflect AVITA’s commitment to innovation and growth within the therapeutic acute wound care industry.

Avita Medical Stockholders Approve Key Amendments and Elections

On June 4, 2025, Avita Medical, Inc. held its Annual Meeting of Stockholders via webcast, where key decisions were made. Stockholders approved amendments to the 2020 Omnibus Incentive Plan, increasing the shares available for issuance by 2,500,000, and approved equity awards for directors and the CEO. Additionally, all proposed directors were elected, Grant Thornton LLP was ratified as the independent auditor, and compensation for executive officers was endorsed, reflecting strong shareholder support for the company’s strategic initiatives.