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Sonendo (SONX)
OTHER OTC:SONX
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Sonendo
(OTC:SONX)
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Rating:45Neutral
Price Target:
$0.38
▲(90.00% Upside)
Action:ReiteratedDate:01/21/26
The score is primarily driven by weak financial performance (losses, leverage concerns, and negative operating cash flow), partially offset by somewhat improved cash burn and a mixed technical picture. Valuation remains a headwind due to a negative P/E and no dividend yield support.
Positive Factors
Recurring revenue model
Sonendo's business centers on capital sales of the GentleWave System plus single-use consumables tied to each procedure. This creates a durable, annuity-like revenue stream once systems are installed, supporting predictable follow-on revenue and higher customer lifetime value over months.
Improving cash burn
The company has materially reduced free cash flow losses and cut capital expenditures, which lengthens runway and reduces near-term financing needs. Sustained cash-burn improvement increases strategic flexibility to invest in adoption or commercialization over the next several months.
Early margin improvement
A modest uptick in gross profit suggests improving unit economics or cost control on procedures and consumables. If sustained, this enhances long-term margin expansion potential as installed base and utilization grow, supporting pathway to operational breakeven over time.
Negative Factors
High leverage / weak equity
A leveraged balance sheet with low shareholders' equity raises solvency and refinancing risk. Elevated debt obligations limit capital allocation for sales, training, or R&D, increase interest burden, and reduce resilience to demand variability over the medium term.
Declining revenue and losses
Falling revenue and sustained net losses undermine the ability to scale consumable-driven recurring revenue. Continued top-line contraction weakens pricing power and installed-base growth, making it harder to achieve operating leverage and durable profitability within several months.
Negative operating cash flow
Ongoing negative operating cash flow signals the core business does not yet generate sufficient cash to fund operations. This creates dependence on external financing, constrains investment in commercialization initiatives, and poses a persistent risk to sustaining growth and installations.
Sonendo (SONX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$98.30K
Dividend YieldN/A
Average Volume (3M)389.00
Price to Earnings (P/E)―
Beta (1Y)-1.00
Revenue Growth-27.73%
EPS Growth45.38%
CountryUS
Employees129
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)N/A
Shares Outstanding427,401
10 Day Avg. Volume222
30 Day Avg. Volume389
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)16.56
Price to Sales (P/S)2.71
P/FCF Ratio-3.46
Enterprise Value/Market Cap89.56
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit0.74
Enterprise Value/Ebitda-0.32
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sonendo Business Overview & Revenue Model
Company DescriptionSonendo, Inc. (SONX) is a medical technology company specializing in the development of advanced dental technologies, specifically focused on endodontics, or root canal treatments. The company's flagship product, the GentleWave System, utilizes a proprietary ultrasound technology to improve the efficiency and effectiveness of root canal procedures. By enhancing the cleaning and disinfection of the root canal system, Sonendo aims to provide better outcomes for patients while transforming dental practices with innovative solutions.
How the Company Makes MoneySonendo generates revenue primarily through the sales of its GentleWave System and the associated disposable instruments needed for its operation. The company sells the GentleWave systems directly to dental practices, which can be a significant upfront cost, and also generates recurring revenue from the sale of disposable components required for each procedure performed using the system. Additionally, Sonendo may engage in partnerships with dental organizations and suppliers to expand its market reach and enhance its product offerings. These relationships can contribute to increased sales and brand recognition within the dental community, further driving revenue growth.
Sonendo Earnings Call Summary
Earnings Call Date:Aug 07, 2024
(Q2-2024)
| % Change Since: |
Next Earnings Date:Mar 25, 2026
Earnings Call Sentiment Positive
The earnings call for Sonendo reflects a positive sentiment overall, with significant improvements in gross margins, operating expenses, and adjusted EBITDA loss, despite challenges in PI sales and total revenue decline. The company is optimistic about its strategic reset and future growth prospects.Q2-2024 Updates
Positive Updates
Strong Growth in Console Sales
Sonendo experienced a 7% year-over-year growth in console sales, selling more consoles compared to the second quarter of 2023, and maintaining a healthy unit backlog.
Gross Margin Improvement
GAAP gross margin for Q2 2024 increased to 37.5%, up from 28.4% in Q1 2024 and negative 5.5% in Q2 2023. Adjusted gross margin also rose to 40.7% from 34.8% in Q1 2024 and 28.7% in Q2 2023.
Reduction in Operating Expenses
Operating expenses decreased by $7.1 million to $9.8 million, marking a 42% reduction compared to the prior year, with significant cuts in sales, marketing, R&D, and G&A costs.
Improved Revenue Guidance
Revenue guidance for the full year 2024 was raised to $31 million to $32 million, up from the prior guidance of $29 million to $31 million.
Adjusted EBITDA Loss Reduction
Adjusted EBITDA loss improved by 53% year-over-year, decreasing by $6.4 million to $5.7 million for Q2 2024, with expectations to further reduce the loss in the second half of 2024.
Negative Updates
Decrease in PI Revenue
PI revenue for Q2 2024 totaled $4.7 million, down from $5.6 million in Q2 2023, with the decline primarily volume-related.
Challenges in PI Sales and Utilization
PI sales decreased 15% year-over-year, with a focus on aligning sales with utilization, which decreased by 3.1% year-over-year.
Total Revenue Decline
Total revenue for Q2 2024 was $8.3 million, compared to $8.8 million in Q2 2023, driven by lower PI sales volumes and a lower console ASP.
Company Guidance
During the Sonendo Q2 2024 earnings call, the company provided updated guidance and highlighted several key metrics illustrating their progress. Sonendo raised their full-year 2024 revenue guidance to a range of $31 million to $32 million, up from the previous $29 million to $31 million. They reported a significant improvement in gross margins, with adjusted gross margin increasing to 40.7% in Q2 2024 from 28.7% in the prior year quarter. The company also achieved a 53% reduction in year-over-year adjusted EBITDA loss, reporting a loss of $5.7 million for the quarter. Sonendo's strategic reset focused on commercial execution, gross margin expansion, and cash conservation, with a notable 42% reduction in operating expenses compared to the prior year. Despite a decrease in PI sales by 15% year-over-year, the company emphasized stabilizing utilization rates and anticipates low single-digit growth in PI sales for the second half of the year. Additionally, Sonendo aims to achieve adjusted gross margins in the 40% to 41% range for the latter half of 2024, with long-term aspirations of reaching 60% as they continue to enhance their operational and financial performance.Sonendo Financial Statement Overview
Summary
Weak fundamentals overall: persistent negative margins and declining revenue (income statement), high leverage/low equity and negative ROE (balance sheet), and still-negative operating cash flow despite improving free cash flow losses (cash flow).Income Statement
Sonendo's income statement reveals a company struggling with profitability and revenue growth. The gross profit margin has been inconsistent, and the net profit margin is negative, indicating substantial losses. Revenue has decreased from the previous year, highlighting growth challenges. Margins like EBIT and EBITDA are also negative, suggesting operational inefficiencies. Despite these challenges, there is a slight improvement in gross profit, which may indicate some potential for margin recovery.45
Neutral
Balance Sheet
The balance sheet of Sonendo indicates high leverage with a concerning debt-to-equity ratio due to low stockholders' equity. The equity ratio is low, suggesting a heavy reliance on debt financing. While total assets have decreased, liabilities remain high, posing a risk to financial stability. The return on equity is negative, reflecting ongoing profitability issues. Overall, the balance sheet highlights financial instability and the need for improved capital management.40
Negative
Cash Flow
Sonendo's cash flow statement shows some positive signs with a significant decrease in free cash flow losses. However, operating cash flow remains negative, indicating ongoing operational cash constraints. The company has managed to reduce its capital expenditures, which helps in conserving cash. While the free cash flow to net income ratio remains unfavorable, the reduction in cash burn is a positive sign for future financial health.50
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 31.70M | 43.87M | 41.66M | 33.20M | 23.35M |
| Gross Profit | 11.84M | 10.72M | 10.48M | 8.34M | 3.88M |
| EBITDA | -26.61M | -54.77M | -51.00M | -41.29M | -39.13M |
| Net Income | -28.03M | -60.92M | -57.05M | -48.50M | -46.66M |
Balance Sheet | |||||
| Total Assets | 31.27M | 78.16M | 137.28M | 115.50M | 76.14M |
| Cash, Cash Equivalents and Short-Term Investments | 11.63M | 46.78M | 91.45M | 84.64M | 51.72M |
| Total Debt | 18.93M | 40.35M | 38.95M | 29.20M | 31.77M |
| Total Liabilities | 26.07M | 49.74M | 55.33M | 43.44M | 330.03M |
| Stockholders Equity | 5.19M | 28.42M | 81.95M | 72.06M | -253.89M |
Cash Flow | |||||
| Free Cash Flow | -24.81M | -46.99M | -62.43M | -50.58M | -39.46M |
| Operating Cash Flow | -24.65M | -46.06M | -61.07M | -48.60M | -38.54M |
| Investing Cash Flow | 45.81M | 42.40M | -74.43M | -1.97M | -916.00K |
| Financing Cash Flow | -24.95M | 4.00K | 68.53M | 83.50M | -983.00K |
Sonendo Technical Analysis
Positive
0.20
Price Trends
0.17
Positive
0.23
Negative
0.49
Negative
Market Momentum
<0.01
Negative
59.47
Neutral
29.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SONX, the sentiment is Positive. The current price of 0.2 is above the 20-day moving average (MA) of 0.14, above the 50-day MA of 0.17, and below the 200-day MA of 0.49, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 29.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SONX.
Sonendo Risk Analysis
Sonendo disclosed 85 risk factors in its most recent earnings report. Sonendo 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
Sonendo Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
52 Neutral | $48.06M | -3.44 | -337.84% | ― | 27.90% | 1.62% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $14.61M | -0.55 | 20.03% | ― | -99.28% | -46.17% | |
48 Neutral | $9.72M | -0.17 | -127.95% | ― | -2.02% | -32.93% | |
47 Neutral | $12.92M | -0.47 | -398.78% | ― | -44.57% | 55.97% | |
45 Neutral | $98.30K | >-0.01 | -199.60% | ― | -27.73% | 45.38% | |
42 Neutral | $58.20M | -0.55 | ― | ― | -25.18% | -9.71% |
* Healthcare Sector Average
SONX
Sonendo
0.23
-2.12
-90.21%
LFWD
Lifeward
0.43
-1.20
-73.77%
ECOR
Electrocore
6.25
-10.97
-63.70%
PAVM
PAVmed
9.47
-14.61
-60.67%
MOVE
Movano
10.89
-36.61
-77.07%
COCH
Envoy Medical
0.71
-0.73
-50.52%
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.