Venus Concept (VERO) AI Stock Analysis

• Market Cap: $3.06M
• Dividend Yield: N/A
• Average Volume (3M): 2.30M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.04
• Revenue Growth: -15.09%
• EPS Growth: -2.50%
• Country: US
• Employees: 304
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Devices
• EPS (TTM): -77.30
• Shares Outstanding: 709,130
• 10 Day Avg. Volume: 6,757,384
• 30 Day Avg. Volume: 2,297,824
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.04
• Price to Cash Flow (P/CF): -0.20
• P/FCF Ratio: 0.00
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Venus Concept is facing financial instability due to high leverage and negative cash flows, which are significant risks to its sustainability. Despite strategic efforts and some operational improvements, the company's challenges overshadow its achievements. Technical indicators show upward price trends, but the lack of supporting data increases uncertainty. Valuation metrics indicate potential risk with limited immediate investor returns. Recent corporate actions, while positive, are insufficient to offset the broader financial challenges.

Positive Factors

International Sales

International restructuring initiatives, which involved transitioning to a distributor-based sales model and exiting unprofitable markets, are beginning to yield promising results, with 4Q24 international distributor sales up roughly 100% year over year.

Market Expansion

Recently, the company expanded its distribution network through new agreements in Asia and South America, received marketing clearance for Bliss MAX in Australia, as well as several products in India.

Product Development

Despite the topline miss, progress on the cash-sales strategy is encouraging, and the company plans to launch its next-gen body device in the third quarter of 2025.

Negative Factors

Capital Structure

There are concerns about the company's capital structure and its associated constraints, particularly after the recent 1-for-11 reverse split, which may limit further reverse split actions necessary for compliance with listing requirements.

Financial Health

The company’s cash position is a concern, with cash of $4.3M and debt of $39.7M, and a cash burn expected to average $3.8M per quarter through 2025.

Revenue Performance

VERO reported lower-than-expected 4Q24 revenue, which was largely attributable to the company’s ongoing shift away from its subscription-based sales model toward a cash system sales strategy, along with higher interest rates perpetuating weak demand for capital equipment.

Venus Concept Business Overview & Revenue Model

Company Description

Venus Concept Inc. (VERO) is a global medical technology company that specializes in the development and commercialization of minimally invasive aesthetic and medical solutions. The company operates within the medical aesthetics industry, offering a broad range of devices designed for non-invasive and minimally invasive procedures, including body contouring, skin tightening, and hair restoration. Venus Concept's products are used by physicians and aesthetic and beauty professionals worldwide to deliver safe, effective, and innovative treatments.

How the Company Makes Money

Venus Concept generates revenue primarily through the sale and lease of its medical aesthetic devices to healthcare providers and beauty professionals. The company's revenue model includes direct sales of devices and consumables, as well as recurring revenue from leasing agreements and service contracts. Significant partnerships with key industry players and distributors also contribute to its earnings, enabling the company to expand its market reach and customer base. Venus Concept's innovative subscription-based business model, which bundles device usage with maintenance and marketing support, further supports its revenue streams by providing predictable, recurring income.

Venus Concept Financial Statement Overview

Summary

Venus Concept faces significant financial challenges, with declining revenue, high leverage, and negative cash flow trends. The company's financial health is under strain, requiring strategic interventions to improve operational efficiency and financial stability. The income statement score is 35 due to declining revenue and profitability. The balance sheet score is 40 because of high leverage and potential financial risk. The cash flow score is 30, highlighting liquidity constraints and negative cash flow trends.

Income Statement

Venus Concept's income statement reveals declining revenue and profitability. The TTM revenue decreased by 18.6% compared to the previous year, and the consistent negative net income indicates ongoing operational challenges. Margins are under pressure, with a net profit margin of -80.7% in the TTM period, reflecting inefficient cost management and high operational expenses.

Balance Sheet

The balance sheet shows a weak equity position with a debt-to-equity ratio of 3.79 in the TTM period, indicating high leverage and potential financial risk. The equity ratio stands at 14%, highlighting limited asset backing for creditors. Return on equity is negative due to consistent losses, suggesting inefficiencies in utilizing shareholder capital.

Cash Flow

Cash flow analysis reveals negative trends, with operating and free cash flows both in deficit, indicating liquidity constraints. The TTM free cash flow deteriorated compared to previous years, and the free cash flow to net income ratio remains negative, highlighting challenges in converting earnings into cash.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
62.11M	76.35M	99.50M	105.62M	78.01M	110.41M
	Gross Profit
45.48M	52.17M	65.97M	74.09M	51.39M	76.65M
	EBIT
-28.15M	-28.31M	-34.88M	-17.54M	-40.45M	-20.29M
	EBITDA
-37.80M	-26.11M	-35.28M	-13.04M	-68.49M	-30.55M
	Net Income Common Stockholders
-50.16M	-37.25M	-43.58M	-22.14M	-82.82M	-42.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.50M	5.40M	11.57M	30.88M	34.30M	15.67M
	Total Assets
13.48M	93.65M	125.38M	153.87M	160.53M	191.13M
	Total Debt
18.61M	79.70M	83.77M	77.87M	79.60M	69.02M
	Net Debt
12.11M	74.30M	72.20M	46.99M	45.30M	53.35M
	Total Liabilities
26.41M	107.10M	116.64M	112.27M	116.76M	114.45M
	Stockholders Equity
-12.93M	-14.02M	8.09M	40.94M	44.23M	74.18M
Cash Flow		Free Cash Flow
-8.10M	-12.97M	-27.32M	-20.28M	-28.94M	-40.72M
	Operating Cash Flow
-8.03M	-12.86M	-26.98M	-19.77M	-28.65M	-39.59M
	Investing Cash Flow
-70.00K	-116.00K	-336.00K	-552.00K	-2.39M	6.38M
	Financing Cash Flow
7.67M	6.80M	8.01M	16.82M	49.67M	42.20M

Venus Concept Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERO, the sentiment is Positive. The current price of 4.31 is above the 20-day moving average (MA) of 3.29, above the 50-day MA of 3.40, and below the 200-day MA of 4.90, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 42.82 is Neutral, neither overbought nor oversold. The STOCH value of 18.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VERO.

Venus Concept Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INMD	80 Outperform	$980.78M	6.36	24.31%	―	-19.76%	0.38%
DERM	57 Neutral	$139.32M	―	-72.60%	―	-29.11%	-219.44%
AXGN	54 Neutral	$704.62M	―	-9.99%	―	17.81%	54.69%
EOLS	51 Neutral	$598.67M	―	-913.07%	―	31.76%	24.85%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
VERO	39 Underperform	$3.06M	―	-496.27%	―	-15.09%	-2.50%
CUTRQ	36 Underperform	$201.86K	―		―	-32.57%	-15.03%

Venus Concept Corporate Events

Venus Concept Completes Debt-to-Equity Exchange with Madryn

On March 31, 2025, Venus Concept Inc. completed an $11 million debt-to-equity exchange with Madryn Health Partners, reducing its debt obligations significantly. This transaction, which involved the conversion of subordinated convertible notes into Series Y preferred stock, is part of the company’s strategy to optimize its capital structure and enhance financial flexibility, supporting its long-term growth and profitability goals.

Venus Concept Secures Funding Amid Executive Resignation

On February 21, 2025, Venus Concept Inc. received a seventh delayed drawdown of $2,300,000 under its Loan and Security Agreement with Madryn Health Partners, with $2,000,000 funded immediately and the remainder to be funded later. The funds are intended for general working capital purposes. Additionally, Hemanth Varghese, the company’s President and COO, announced his resignation effective March 28, 2025, citing personal reasons unrelated to company disagreements.