Axonics Inc (AXNX, Financial) recently experienced a daily gain of 4.27%, yet over the past three months, the stock has seen a decline of 10.2%. With a reported Loss Per Share of $0.25, investors are faced with the question: Is Axonics significantly undervalued? The following analysis delves into the company's valuation to provide an answer. We invite you to explore the insights that follow.
Company Introduction
Axonics Inc is a trailblazer in the medical technology landscape of the United States. The company is dedicated to the development and commercialization of innovative products designed to enhance the quality of life for adults suffering from bladder and bowel dysfunction. Its portfolio includes implantable Sacral Neuromodulation (SNM) systems for urinary urge incontinence and urinary urgency frequency (UUF), as well as a urethral bulking agent, Bulkamid, for treating female stress urinary incontinence. SNM therapy is primarily utilized to address conditions such as overactive bladder, fecal incontinence, and urinary retention. With a current stock price of $52.56 and a Fair Value (GF Value) of $99.09, Axonics stands as a compelling case for valuation examination.
Summarize GF Value
The GF Value is a unique metric that captures the intrinsic value of a stock by considering historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and future business performance estimates. If a stock's price gravitates significantly above the GF Value Line, it may be overvalued, potentially leading to subpar future returns. Conversely, a price well below the GF Value Line could indicate an undervalued stock with the prospect of higher future returns. At its current price of $52.56, Axonics (AXNX, Financial) exhibits every indication of being significantly undervalued, with a market cap of $2.70 billion, suggesting a promising outlook for long-term returns.
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Financial Strength
Investing in companies with robust financial strength is crucial to mitigate the risk of permanent capital loss. Axonics boasts a cash-to-debt ratio of 121.08, surpassing 85.68% of its peers in the Medical Devices & Instruments industry. This impressive ratio has earned Axonics a financial strength rank of 9 out of 10, highlighting a solid balance sheet.
Profitability and Growth
The profitability of a company is a key indicator of its investment viability. Axonics has posted a revenue of $342.60 million over the past twelve months, with a Loss Per Share of $0.25. Its operating margin stands at -3.15%, which, though not stellar, is part of a broader narrative. The company's profitability rank is 3 out of 10, reflecting areas for improvement.
In terms of growth, Axonics shines with a 3-year average revenue growth rate that outperforms 96.97% of companies in its industry. Moreover, its 3-year average EBITDA growth rate of 27.2% ranks better than 73.38% of its peers, underscoring a strong growth trajectory.
ROIC vs. WACC
The comparison of a company's Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) is a vital measure of profitability. Axonics's ROIC over the past 12 months is -3.21, while its WACC is 8.78, indicating challenges in creating shareholder value in the current period. This comparison provides a nuanced view of the company's financial performance.
Conclusion
In summary, Axonics (AXNX, Financial) appears to be significantly undervalued, presenting a potentially lucrative opportunity for investors. The company's robust financial condition and promising growth prospects, despite its current profitability challenges, make it an interesting candidate for further research. To gain deeper insights into Axonics stock, interested parties are encouraged to review its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
