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Venus Concept (VERO)
NASDAQ:VERO
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Venus Concept
(NASDAQ:VERO)
41Neutral
Positive Factors
International Expansion
The company is reaching an inflection point in its international business, as VERO executes on its strategic shift towards increased reliance on distributors within these markets.
Product Approvals
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.
Resource Allocation
VERO is focused on cash management and allocating its resources to high priority initiatives, such as R&D efforts for its next-gen body contouring system.
Negative Factors
Debt Concerns
Concerns remain about the company's debt overhang and the prevailing aesthetic industry headwinds in the US.
Revenue Performance
VERO’s significantly lower-than-expected 3Q24 revenue reflects persistent weakness in the US market, as well as company-specific issues.
Strategic Uncertainty
The trajectory of the strategic turnaround remains uncertain, and therefore, based on risk/reward analysis, there is no current recommendation for purchasing VERO shares.
Venus Concept (VERO) vs. S&P 500 (SPY)
Market Cap
$1.81M
Dividend YieldN/A
Average Volume (3M)78.41K
Price to Earnings (P/E)―
Beta (1Y)-0.19
Revenue Growth-18.55%
EPS Growth-15.21%
CountryUS
Employees304
SectorHealthcare
Sector Strength78
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-88.18
Shares Outstanding659,571
10 Day Avg. Volume72,886
30 Day Avg. Volume78,413
Financial Highlights & Ratios
PEG RatioN/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 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 ConsensusHold
Number of Analyst Covering1
Venus Concept Business Overview & Revenue Model
Company DescriptionVenus Concept Inc. (NASDAQ: VERO) is a global medical technology company specializing in the development and commercialization of innovative, non-invasive aesthetic and hair restoration technologies. The company operates in the medical aesthetics sector, offering a comprehensive portfolio of devices and products designed to improve patient outcomes and enhance aesthetic practices. Venus Concept's core offerings include advanced solutions for skin tightening, body contouring, hair restoration, and other aesthetic treatments, leveraging cutting-edge technologies to meet the growing demand in the beauty and wellness industry.
How the Company Makes MoneyVenus Concept primarily generates revenue through the sale and lease of its medical devices and aesthetic treatment systems to healthcare providers, clinics, and aesthetic centers worldwide. The company also earns income from service contracts, consumable sales related to its devices, and training sessions for practitioners. A significant portion of its revenue is derived from its subscription-based business model, which provides clients with a comprehensive package that includes equipment, software updates, marketing support, and technical service. This model ensures a steady stream of income through recurring payments. Additionally, Venus Concept engages in strategic partnerships and collaborations to enhance its market presence and expand its product offerings, contributing further to its revenue streams.
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.35
Negative
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.40
Negative
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.30
Negative
| 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 | ||||
| 16.12M | 5.40M | 11.57M | 30.88M | 34.30M | 15.67M | Total Assets |
| 30.97M | 93.65M | 125.38M | 153.87M | 160.53M | 191.13M | Total Debt |
| 19.47M | 79.70M | 83.77M | 77.87M | 79.60M | 69.02M | Net Debt |
| 3.35M | 74.30M | 72.20M | 46.99M | 45.30M | 53.35M | Total Liabilities |
| 29.39M | 107.10M | 116.64M | 112.27M | 116.76M | 114.45M | Stockholders Equity |
| 1.58M | -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
Negative
2.75
Price Trends
3.77
Negative
3.92
Negative
5.44
Negative
Market Momentum
-0.26
Positive
42.91
Neutral
33.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERO, the sentiment is Negative. The current price of 2.75 is below the 20-day moving average (MA) of 3.41, below the 50-day MA of 3.77, and below the 200-day MA of 5.44, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 42.91 is Neutral, neither overbought nor oversold. The STOCH value of 33.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VERO.
Venus Concept Risk Analysis
Venus Concept disclosed 46 risk factors in its most recent earnings report. Venus Concept 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
Venus Concept Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.31B | 8.04 | 24.31% | ― | -19.76% | 0.38% | |
55 Neutral | $772.47M | ― | -9.99% | ― | 17.81% | 54.69% | |
54 Neutral | $808.19M | ― | -913.07% | ― | 31.76% | 24.85% | |
49 Neutral | $6.90B | 0.02 | -54.05% | 2.46% | 24.91% | -3.14% | |
41 Neutral | $1.81M | ― | -496.27% | ― | -18.55% | -15.21% | |
39 Underperform | $107.58M | ― | -129.58% | ― | -27.69% | -27.91% | |
36 Underperform | $2.18M | ― | 52.08% | ― | -32.57% | -15.03% |
* Healthcare Sector Average
Performance Comparison
VERO
Venus Concept
2.87
-4.96
-63.35%
CUTR
Cutera
0.10
-1.88
-94.95%
AXGN
AxoGen
17.45
9.40
116.77%
EOLS
Evolus
13.42
-0.62
-4.42%
INMD
InMode
18.16
-3.76
-17.15%
DERM
Journey Medical Corp
5.31
1.90
55.72%
Venus Concept Earnings Call Summary
Earnings Call Date: Nov 13, 2024 | % Change Since: -32.93% | Next Earnings Date: Mar 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view. On the positive side, there were significant strategic achievements in reducing cash used and debt, as well as successful international restructuring and new product registrations. However, these were balanced by challenges in the U.S. market, overall revenue declines, and extended sales cycles due to macroeconomic headwinds.Highlights
International Business Strategic Shift
Sales to distributors increased nearly 60% in Q3, indicating the early benefits of repositioning the international business from unprofitable direct markets to high-value distributors.
Cash Flow Improvement
Achieved a 25% reduction in cash used in operations year-over-year for Q3 and a 40% reduction over the first 9 months of 2024.
Debt Reduction
The company reduced total debt obligations to approximately $34.6 million, down 54% from $74.9 million at the end of 2023.
New Product Launches
New products like BlissMAX were registered in major markets, with launches expected to benefit future quarters.
Regulatory Clearances and International Expansion
Secured regulatory clearances for products in Canada, Australia, Israel, and India, with new distribution partnerships in place.
Lowlights
U.S. Revenue Decline
United States revenue decreased by 23% year-over-year, impacted by macroeconomic headwinds including high interest rates and tighter credit markets.
Overall Revenue Decline
Total revenue for Q3 was $15 million, down 15% year-over-year.
Decrease in Lease Revenue
Lease revenue declined 23% in the U.S. and 39% overall year-over-year.
Extended Deal Cycles
Longer deal cycles due to economic conditions, with key deals being pushed into future quarters.
Company Guidance
During Venus Concept's Q3 2024 earnings call, the company provided detailed guidance on various financial metrics and strategic initiatives. The company's third-quarter revenue was $15 million, reflecting a 15% year-over-year decrease primarily due to a 23% decline in U.S. revenue. Sales to international distributors, however, increased by nearly 60%, indicating positive momentum in the APAC and EMEA regions. The company's strategic shift to prioritize cash system sales over internal lease programs resulted in cash sales comprising 76% of U.S. system sales, up from 69% the previous year. This strategy contributed to a 25% reduction in cash used in operations year-over-year. Venus Concept also made significant progress in restructuring its debt, reducing total debt obligations by 54% from the end of 2023 to $34.6 million. The company expects to benefit from new product entries in key markets and anticipates Q4 revenue of at least $17 million. Additionally, Venus Concept received a 180-day extension from NASDAQ to regain compliance with the minimum bid price requirement, a positive development as the company continues to navigate macroeconomic challenges and focus on long-term profitability.Venus Concept Corporate Events
Executive/Board ChangesPrivate Placements and Financing
Venus Concept Secures Loan Amendment; Board Member Resigns
Neutral
Dec 3, 2024
Venus Concept Inc. has entered into a Loan Amendment and Consent Agreement, easing liquidity requirements and deferring principal payments to support ongoing operations. Additionally, a Ninth Bridge Loan Amendment increased financing capacity and extended maturity deadlines, ensuring sufficient funds for working capital needs. Meanwhile, Garheng Kong, M.D. has resigned from the board, with no disputes cited as the reason.
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.