Wednesday, BTIG initiated coverage on Apyx Medical Corp. (NASDAQ: NASDAQ:APYX) with a Neutral rating. The firm cited the company's involvement in the cosmetic surgery market through its Renuvion platform, which offers a minimally invasive solution for skin tightening by using helium plasma technology. The device is commonly paired with liposuction, the leading surgical aesthetic procedure both in the U.S. and globally.
Apyx Medical's Renuvion distinguishes itself with over 90 clinical papers that back its safety and efficacy in various applications and treatment areas. This substantial evidence has earned the platform unique FDA indications, setting it apart from competitors. Moreover, the potential for increased growth driven by a rise in GLP-1 adoption, which could stimulate new demand for skin tightening procedures, was highlighted as a key underappreciated factor.
Despite the innovative technology and its market advantages, BTIG remains cautious due to recent contractions in demand for aesthetic capital equipment and procedures. This trend reflects broader economic challenges that have impacted the industry. Additionally, Apyx Medical's current lack of profitability and upcoming financial hurdles are seen as potential risks that could weigh on the company's stock performance.
BTIG's stance is to observe market demand trends for signs of stabilization and to gain clearer insights into Apyx Medical's path to profitability before reconsidering their rating. The firm's analysis suggests a wait-and-see approach for investors until these factors show improvement.
In other recent news, Apyx Medical Corporation reported mixed financial results for the second quarter of fiscal year 2024. Despite a 10% decrease in total revenue to $12.1 million, the company witnessed a significant rise in sales of its OEM products. The challenging market conditions for capital equipment resulted in a decline in global generator sales. However, Apyx Medical is responding by emphasizing cost control and cash optimization.
In terms of earnings, the company's gross profit fell by 19% to $7.5 million and the loss from operations rose by 349% to $5.5 million. Meanwhile, the net loss attributable to stockholders expanded to $6.6 million from $1 million year-over-year. The company's financial guidance for 2024 projects total revenue in the range of $50.6 million to $52.1 million and a net loss of approximately $24.5 million to $23.5 million.
These are some of the recent developments in Apyx Medical's business operations. The company is also undertaking direct-to-consumer initiatives and a giveback program called "Renewing Lives." Despite the current market challenges, Apyx Medical expects stronger growth in the second half of 2024, while maintaining a focus on controlling costs and optimizing cash efficiency.
InvestingPro Insights
Recent InvestingPro data provides additional context to BTIG's cautious stance on Apyx Medical Corp. (NASDAQ: APYX). The company's market capitalization stands at a modest $41.71 million, reflecting its current position in the medical device market. Apyx's revenue for the last twelve months as of Q2 2023 was $49.03 million, with a slight growth of 3.36% over the same period. However, the quarterly revenue growth for Q2 2023 showed a decline of 10.47%, aligning with BTIG's observations about recent contractions in demand.
InvestingPro Tips highlight some of the challenges Apyx faces. The company is "quickly burning through cash" and "not profitable over the last twelve months," which supports BTIG's concerns about profitability. Additionally, analysts "do not anticipate the company will be profitable this year," further explaining the neutral rating. On a positive note, Apyx "operates with a moderate level of debt" and its "liquid assets exceed short-term obligations," which could provide some financial flexibility as it navigates current market challenges.
These insights are just a sample of the valuable information available on InvestingPro. Subscribers can access 7 additional tips for Apyx Medical Corp., offering a more comprehensive analysis to inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.