Markets

Is Ra Medical Systems a Great Penny Stock to Own?

The shares of commercial-stage medical gadget manufacturer Ra Medical Systems (RMED) have actually rolled 92.7% in price over the past year because of capitalist issues bordering the company’s bad financial health. Also, offered the uncertainty surrounding the FDA’s approval of its DABRA catheter laser system, the question becomes, is the penny stock a winner now? Read on, let’s learn.

Medical tool company Ra Medical Systems, Inc. (RMED – Get Score) in Carlsbad, Calif., is designs, creates, and markets excimer lasers to deal with vascular diseases. The business has made significant development in vital efforts, including its DABRA technology laser system as well as atherectomy critical clinical study. Nonetheless, the RMED stock has declined 86.8% in cost over the past six months as well as 92.7% over the past year, reflecting investor concerns over its unsatisfactory revenue as well as earnings development as well as the sale of its dermatology business.

Closing the other day’s session at $0.42, the stock is currently trading 95.7% below its 52-week high of $9.82, suggesting bearish view.

While the commercial-stage medical device business has filed a 510( k) application with the united state Food and Drug Administration (FDA) for its DABRA catheter, its commercialization potential customers continue to be uncertain up until its product gets approval from the FDA. Additionally, the stock’s unfavorable profitability could make financiers distressed.

Selling Shares

Last month, RMED valued an underwritten public offering of devices of its common stock, consisting of warrants to purchase approximately 27.6 million shares of the ordinary shares and also pre-funded warrants to buy as much as 14.47 shares of ordinary shares. The medical gadget maker expects around $12.1 million in gross profits from the offering.

Divestiture of Dermatology Service

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In the 3rd quarter, RMED completed the sale of its Pharos dermatology business for web proceeds of approximately $3.5 million. This was done as a part of the business’s strategies to focus its resources on the market for medical gadgets to deal with peripheral artery disease (PAD). Nonetheless, the divestiture might adversely impact the medical gadget manufacturer’s profits as well as price structure in the near term and create RMED’s stock price to topple even more.

Grim Earnings

The company’s trailing-12-month ROA and cash from operations are unfavorable 100.6% and $31.33 million, respectively. Moreover, its trailing-12-month gross profit margin, ROE and ROTC are negative 18.9%, 115%, and also 67%, respectively. And also its 0.12% property turn over ratio is 65.2% lower than the 0.34% sector standard.

Failing Financials
RMED’s internet earnings from proceeding procedures can be found in at $5,000 for the third quarter, ended Sept. 30, 2021, versus $68,000 in the third quarter of 2020. Its gross loss stood at $24,000 for the quarter, while operating loss was available in at $7.39 million. Moreover, its net loss amounted to $4.3 million, while its loss per share can be found in at $0.67. RMED reported a negative adjusted EBITDA of $6.95 million versus $6.06 million in the prior-year quarter. As well as its total overhead grew 2.1% year-over-year to $7.15 million during this period.

POWR Scores Reflect Bleak Potential Customers

RMED has a total D rating, which converts to Market in our POWR Scores system. The POWR Rankings are computed by considering 118 unique elements, with each variable weighted to an optimal degree.

Our proprietary rating system additionally assesses each stock based upon eight distinct categories. RMED has an F grade for High quality. This mirrors the stock’s adverse ROA and also cash flow from procedures.

The business has a D grade in Energy, regular with its rate decline over the past 6 months. Also, it has an F quality for Security, which is in sync with its fairly high beta of 1.65.

Beyond the qualities I have highlighted, one can have a look at added RMED scores for Belief, Growth, as well as Worth below. Amongst the 166 stocks in the D-rated Medical– Instruments & Tools market, RMED is ranked # 119.

Bottom Line

Experts anticipate RMED’s EPS to remain adverse this year. While its efforts to create DABRA catheters bode well, its negative profit margin and inadequate economic stamina can trigger its shares to decline further. Additionally, the uncertainty bordering the regulative clearance as well as commercialization of its DABRA laser system could raise capitalists’ worries. So, we believe it is best prevented currently.

How Does Ra Medical Systems (RMED) Stack Up Against its Peers?

While RMED has a general D (Market) score in our proprietary rating system, one could want to think about taking a look at its industry peers, Fonar Corporation (FONR – Obtain Ranking), Electromed, Inc. (ELMD – Get Ranking), as well as Abbott Laboratories (ABT – Obtain Ranking), having an A (Solid Buy) ranking.