SurModics (SRDX) AI Stock Analysis

• Market Cap: $424.40M
• Dividend Yield: N/A
• Average Volume (3M): 81.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.66
• Revenue Growth: -14.96%
• EPS Growth: -245.49%
• Country: US
• Employees: 389
• Sector: Healthcare
• Sector Strength: 43
• Industry: Medical - Devices
• EPS (TTM): -0.13
• Shares Outstanding: 14,299,266
• 10 Day Avg. Volume: 69,611
• 30 Day Avg. Volume: 81,267
• PEG Ratio: 0.52
• Price to Book (P/B): 3.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -51.82
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $43.00
• Price Target Upside: 47.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 49 Neutral
• Price Target: $29.00 ▼( -0.55% Downside)

SurModics' overall stock score is primarily affected by its financial performance and valuation concerns, with declining revenues and consistent losses leading to negative profitability metrics. The technical analysis suggests neutral momentum, while the high-risk valuation due to a negative P/E ratio and no dividends further impacts the score.

Positive Factors

Financial compensation

If the GTCR deal is blocked, SRDX is entitled to a $50.2 million break-up fee, which could provide significant value.

Legal perspective

GTCR/SRDX lawyers argue that the transaction enhances competition, with points highlighting that the FTC inaccurately sizes the markets and uses outdated data.

Product expansion

The addition of the Pounce XL should only broaden and strengthen the company’s value proposition to physicians.

Negative Factors

Financial performance

Surmodics’ Q2 financial results fell short of expectations, with revenue and adjusted EPS both underperforming analyst estimates.

Regulatory challenges

The FTC filed a complaint stating that the proposed acquisition of Surmodics by GTCR is anticompetitive, which is now in the early stages of litigation.

Revenue decline

SRDX's revenue growth worsened to a 12% decline in F2Q25 from a 2% decline in F1Q25.

SurModics Business Overview & Revenue Model

Company Description

Surmodics, Inc., together with its subsidiaries, provides surface modification technologies for intravascular medical devices, and chemical components for in vitro diagnostic immunoassay tests and microarrays in the United States and internationally. It operates in two segments, Medical Device and In Vitro Diagnostics (IVD). The Medical Device segment engages in the provision of surface modification coating technologies to enhance access, deliverability, and predictable deployment of medical devices; and drug-delivery coating technologies to provide site-specific drug-delivery from the surface of a medical device for coronary, peripheral, neuro-vascular and structural heart, and other markets, as well as design, development, and manufacturing of interventional medical devices, primarily balloons and catheters, including drug-coated balloons for peripheral arterial disease treatment and other applications. The IVD segment designs, develops, and manufactures component products and technologies for diagnostic immunoassay, as well as molecular test and biomedical research applications. This segment offers protein stabilization reagents, substrates, surface coatings, and antigens. The company was founded in 1979 and is headquartered in Eden Prairie, Minnesota.

How the Company Makes Money

SurModics generates revenue through a combination of product sales, royalties, and licensing fees. The company's primary revenue streams include the sale of reagent products used in in vitro diagnostics and the licensing of its proprietary coating technologies to medical device manufacturers. SurModics' partnerships with major healthcare and medical device companies play a significant role in its revenue generation, as these collaborations often involve long-term agreements for the development and commercialization of advanced medical technologies. Additionally, the company earns royalties from products that utilize its patented technologies, further diversifying its income.

SurModics Financial Statement Overview

Summary

SurModics faces challenges with declining revenues and consistent losses, impacting profitability metrics negatively. Despite having no debt in the latest period, the company struggles with cash flow generation. The balance sheet remains robust with a high equity ratio, providing some financial stability.

Income Statement

The company shows a declining trend in revenue and profitability. The TTM gross profit margin is healthy at approximately 73.4%, but the net profit margin is negative due to consistent losses. The company has not achieved positive EBIT or EBITDA margins in the recent TTM period, indicating operational inefficiencies.

Balance Sheet

The balance sheet is relatively stable with no total debt in the TTM period, improving the debt-to-equity ratio to zero. However, the return on equity is negative due to net losses. The equity ratio is strong, indicating a solid base of equity compared to total assets.

Cash Flow

The company has shown a decline in free cash flow, with negative free cash flow in the TTM period. However, the operating cash flow to net income ratio suggests some efficiency in converting net income to cash flows despite losses. Free cash flow to net income ratio is not favorable due to negative free cash flow.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
121.58M	126.08M	132.58M	99.95M	105.14M	94.86M
	Gross Profit
88.33M	93.05M	61.02M	29.00M	41.23M	29.36M
	EBIT
-12.47M	-5.64M	5.15M	-22.10M	6.70M	-1.25M
	EBITDA
-5.79M	4.73M	15.15M	-12.22M	12.17M	5.94M
	Net Income Common Stockholders
-19.86M	-11.54M	-1.54M	-27.27M	4.24M	1.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
31.15M	40.11M	45.35M	19.00M	38.87M	61.10M
	Total Assets
163.21M	178.56M	185.73M	158.36M	194.59M	168.76M
	Total Debt
0.00	33.24M	29.41M	13.84M	10.00M	436.00K
	Net Debt
3.63M	-2.87M	-12.01M	-5.16M	-21.15M	-30.35M
	Total Liabilities
52.97M	59.66M	65.82M	49.97M	54.51M	37.71M
	Stockholders Equity
110.25M	118.90M	119.91M	108.39M	140.09M	131.06M
Cash Flow		Free Cash Flow
-7.44M	-3.24M	7.60M	-20.59M	9.11M	10.34M
	Operating Cash Flow
-5.32M	248.00K	10.51M	-17.22M	15.39M	14.01M
	Investing Cash Flow
4.15M	-2.94M	-6.82M	6.23M	-25.24M	-9.07M
	Financing Cash Flow
-2.65M	-2.95M	18.41M	-375.00K	10.23M	-4.65M

SurModics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.16
• 50DMA: Positive
• 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 SRDX, the sentiment is Positive. The current price of 29.16 is above the 20-day moving average (MA) of 28.38, above the 50-day MA of 28.85, and below the 200-day MA of 35.61, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 54.10 is Neutral, neither overbought nor oversold. The STOCH value of 77.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SRDX.

SurModics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLPT	61 Neutral	$361.51M	―	-76.21%	―	23.22%	9.54%
VREX	56 Neutral	$337.81M	―	-7.46%	―	-3.31%	-199.23%
Sector *	53 Neutral	$5.14B	3.06	-43.57%	2.81%	16.81%	-0.12%
SENS	50 Neutral	$399.40M	―	-161.19%	―	1.64%	16.02%
SRDX	49 Neutral	$424.40M	―	-16.96%	―	-14.96%	-245.49%
TMCI	48 Neutral	$420.83M	―	-45.73%	―	7.54%	4.28%
PACB	42 Neutral	$306.09M	―	-177.29%	―	-23.99%	-100.40%