Avinger, Inc. (AVGR) Bundle
Understanding Avinger, Inc. (AVGR) Revenue Streams
Understanding Avinger, Inc.’s Revenue Streams
For the nine months ended September 30, 2024, revenue decreased by approximately $0.4 million or 7% compared to the same period in 2023. Revenues related to sales of disposable catheters decreased by 7% to $4.9 million, while revenues related to Lightbox imaging consoles and other revenues decreased by less than 1% to less than $0.1 million.
For the three months ended September 30, 2024, revenues totaled $1.65 million, down from $1.82 million in the same quarter of 2023, reflecting a decrease of approximately $0.2 million or 9%. Revenues from disposable catheters decreased to $1.5 million.
Year-over-Year Revenue Growth Rate
In terms of historical trends, the revenue figures for the past three years are as follows:
| Year | Revenue (in millions) | Year-over-Year Change |
|---|---|---|
| 2021 | $10.1 | N/A |
| 2022 | $8.3 | -17.8% |
| 2023 | $7.7 | -7.2% |
Contribution of Different Business Segments to Overall Revenue
The company's revenue primarily comes from:
- Disposable Catheters: $4.9 million for the nine months ended September 30, 2024.
- Lightbox Imaging Consoles: less than $0.1 million for the same period.
For the nine months ended September 30, 2024, approximately 93% of revenues were derived from the United States.
Analysis of Significant Changes in Revenue Streams
The decrease in revenue for the nine months ended September 30, 2024, reflects the impact of a reduced sales force and a strategic shift to focus on existing users rather than expanding the customer base. The company has indicated that staffing shortages and resource constraints have adversely affected revenue generation.
In summary, the revenue performance shows a declining trend influenced by several factors, including changes in sales strategy and market conditions.
A Deep Dive into Avinger, Inc. (AVGR) Profitability
A Deep Dive into Avinger, Inc.'s Profitability
Gross Profit Margin:
| Period | Revenues ($ in thousands) | Cost of Revenues ($ in thousands) | Gross Profit ($ in thousands) | Gross Margin (%) |
|---|---|---|---|---|
| Q3 2024 | 1,650 | 1,224 | 426 | 26% |
| Q3 2023 | 1,817 | 1,429 | 388 | 21% |
| 9M 2024 | 5,356 | 4,209 | 1,147 | 21% |
| 9M 2023 | 5,746 | 4,117 | 1,629 | 28% |
Operating Profit and Net Profit Margins:
| Period | Loss from Operations ($ in thousands) | Net Loss ($ in thousands) | Net Loss per Share ($) |
|---|---|---|---|
| Q3 2024 | (3,669) | (3,706) | (1.82) |
| Q3 2023 | (4,033) | (4,476) | (2.92) |
| 9M 2024 | (12,885) | (13,585) | (6.93) |
| 9M 2023 | (12,020) | (13,296) | (21.48) |
Trends in Profitability Over Time:
The gross margin for the nine months ended September 30, 2024, decreased to 21% from 28% in the same period of 2023. The increase in cost of revenues by 2% in 2024, compared to the previous year, primarily drove this decline, alongside a 7% decrease in revenues during the same period.
Comparison of Profitability Ratios with Industry Averages:
The industry average gross margin for medical device companies typically ranges between 50% and 70%, indicating that the company is currently underperforming relative to its peers.
Operational Efficiency Analysis:
- Research and Development (R&D) expenses for 9M 2024 were approximately $3.052 million, down from $3.388 million in 9M 2023, reflecting a 10% decrease.
- Selling, General and Administrative (SG&A) expenses increased by 7% to $10.980 million in 9M 2024 from $10.261 million in the previous year.
- The operating expenses totaled $14.302 million for 9M 2024, compared to $13.649 million for 9M 2023, marking an overall increase.
Conclusion on Cost Management:
The decline in gross margins from 28% to 21% signifies challenges in cost management, particularly in labor and material costs, which are impacting overall profitability.
Debt vs. Equity: How Avinger, Inc. (AVGR) Finances Its Growth
Debt vs. Equity: How Avinger, Inc. Finances Its Growth
Avinger, Inc. has a complex financial structure characterized by both debt and equity financing. As of September 30, 2024, the company reported total liabilities of $9.7 million, which includes $4.2 million classified as current borrowings. The total long-term debt stands at $5.5 million.
Overview of the Company's Debt Levels
The company maintains a mix of short-term and long-term debt. The short-term debt comprises $4.2 million of the total liabilities, while long-term debt is reported at $5.5 million. This indicates a reliance on debt for financing operations, particularly given the company's ongoing losses.
Debt-to-Equity Ratio and Comparison to Industry Standards
Avinger’s debt-to-equity ratio is calculated as follows:
| Debt ($M) | Equity ($M) | Debt-to-Equity Ratio |
|---|---|---|
| 9.7 | 3.9 | 2.49 |
This ratio of 2.49 suggests that Avinger is significantly more leveraged compared to industry peers, where the average debt-to-equity ratio typically ranges from 1.0 to 1.5. This higher leverage indicates increased financial risk.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In March 2024, Avinger executed an amendment to its existing loan agreement, which included the conversion of $11.0 million of loan principal into Series H convertible preferred stock. This conversion is part of a broader strategy to manage debt levels and improve liquidity.
The company’s outstanding debt is subject to various covenants, including a liquidity requirement of $3.5 million, which was temporarily reduced to $1.5 million until July 31, 2024. As of September 30, 2024, Avinger was compliant with all applicable covenants.
How the Company Balances Between Debt Financing and Equity Funding
Avinger has historically relied on a combination of debt and equity financing to fund its operations. As of September 30, 2024, the total stockholders' equity was reported at $3.9 million, indicating the company’s ongoing need to raise capital through equity to offset its debt obligations.
In addition to debt, Avinger has issued equity through various public offerings and private placements, generating $11.8 million from financing activities in the nine months ended September 30, 2024. This approach helps to mitigate the risks associated with high leverage, although it may dilute existing shareholders.
Assessing Avinger, Inc. (AVGR) Liquidity
Assessing Avinger, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated at 2.0, indicating sufficient short-term assets to cover current liabilities.
Quick Ratio: The quick ratio stands at 1.5, reflecting the company's ability to meet its short-term obligations without relying on inventory sales.
Working Capital Trends
As of September 30, 2024, working capital is reported at $5.9 million, up from $5.3 million at December 31, 2023. This increase signifies improved operational efficiency and liquidity management.
| Date | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 30, 2024 | $10,000 | $4,100 | $5,900 |
| December 31, 2023 | $9,200 | $3,900 | $5,300 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, cash flows from operating activities show a net outflow of $11.2 million, primarily driven by a net loss of $13.6 million.
In terms of investing activities, there were no cash flows reported for the nine months ended September 30, 2024.
Cash flows from financing activities yielded a positive inflow of $11.8 million, resulting from the issuance of common and preferred stock.
| Cash Flow Type | Amount (in thousands) |
|---|---|
| Operating Activities | ($11,163) |
| Investing Activities | $0 |
| Financing Activities | $11,789 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents totaled $5.9 million, indicating a slight increase from $5.3 million at the end of 2023. However, the company anticipates ongoing losses and will need to raise additional capital to meet operational needs, potentially impacting liquidity.
Accumulated deficit as of September 30, 2024 stands at $434.3 million, which raises concerns regarding long-term sustainability without significant revenue generation or additional financing.
Is Avinger, Inc. (AVGR) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company reported a net loss of $3.7 million for the three months ended, and a total net loss of $13.6 million for the nine months ended. The accumulated deficit reached $434.3 million.
Price-to-Earnings (P/E) Ratio
The company has not reported any earnings, resulting in a P/E ratio that cannot be calculated. For investors, this absence of earnings is a significant indicator of the company's financial health and potential for profitability moving forward.
Price-to-Book (P/B) Ratio
The book value of equity as of September 30, 2024, was $3,875 thousand. With a total of 2,783,891 shares outstanding, the P/B ratio can be calculated as follows:
P/B Ratio = Market Price per Share / Book Value per Share
If the market price per share is $1.66 (based on the June 2024 offering price), then the book value per share is:
Book Value per Share = Total Book Value / Total Shares Outstanding = $3,875 / 2,783,891 = $0.00139
Thus, the P/B ratio is approximately 119.4.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The company reported an EBITDA loss, making the EV/EBITDA ratio non-applicable for valuation purposes. Investors should note the operational losses reflected in the EBITDA metrics.
Stock Price Trends Over the Last 12 Months
Over the past year, the stock price has fluctuated significantly. Following a reverse stock split on September 12, 2023, the stock price was noted at $1.00 per share. As of the latest reports in September 2024, the stock price was approximately $1.66.
Dividend Yield and Payout Ratios
The company does not currently pay any dividends. Therefore, the dividend yield and payout ratios are both 0%.
Analyst Consensus on Stock Valuation
As of the latest consensus, analysts have rated the stock with a hold recommendation. This is reflective of the company’s ongoing struggles with profitability and operational adjustments.
Valuation Summary Table
| Metric | Value |
|---|---|
| Net Loss (Q3 2024) | $3.7 million |
| Net Loss (9M 2024) | $13.6 million |
| Accumulated Deficit | $434.3 million |
| P/E Ratio | N/A |
| P/B Ratio | 119.4 |
| EV/EBITDA Ratio | N/A |
| Stock Price (latest) | $1.66 |
| Dividend Yield | 0% |
| Analyst Rating | Hold |
Key Risks Facing Avinger, Inc. (AVGR)
Key Risks Facing Avinger, Inc. (AVGR)
Overview of Internal and External Risks:
Avinger, Inc. faces significant internal and external risks that could impact its financial health. Key risks include:
- Industry Competition: The medical device industry is highly competitive, with numerous companies vying for market share. Avinger has seen revenue fluctuations due to intense competition and changes in market dynamics.
- Regulatory Changes: The company operates in a heavily regulated environment. Changes in regulations or delays in obtaining regulatory approvals can adversely affect operations.
- Market Conditions: Economic downturns and changes in healthcare spending can impact demand for Avinger’s products.
Operational Risks:
Operational challenges include:
- As of September 30, 2024, Avinger reported a net loss and comprehensive loss of $3.7 million for the quarter and $13.6 million for the nine months ended.
- Accumulated deficit as of September 30, 2024, stood at $434.3 million.
- Revenue for the nine months ended September 30, 2024, decreased by approximately 7% to $5.4 million, compared to $5.7 million in the prior year.
Financial Risks:
Financial risks include:
- Interest expense, net, for the nine months ended September 30, 2024, decreased by approximately 46% to $0.7 million.
- Net cash used in operating activities for the nine months ended September 30, 2024, was $11.2 million.
Strategic Risks:
Strategic risks are highlighted by:
- A reduction in the size of the field sales force in June 2024, impacting revenue generation efforts.
- As of September 30, 2023, the company had cash and cash equivalents of $5.3 million, increasing to $5.9 million by September 30, 2024.
Mitigation Strategies:
Mitigation efforts include:
- Streamlining operations through a 17 employee reduction in June 2024 to manage costs.
- Focus on strengthening relationships with existing customers to drive utilization of current products.
- Engaging in strategic collaborations to enhance funding and operational capabilities.
| Risk Category | Description | Financial Impact |
|---|---|---|
| Operational Risks | Net loss for Q3 2024 | $3.7 million |
| Financial Risks | Accumulated deficit | $434.3 million |
| Revenue Risks | Revenue decrease for 9 months | 7% decrease to $5.4 million |
| Cash Flow Risks | Net cash used in operations | $11.2 million |
Future Growth Prospects for Avinger, Inc. (AVGR)
Future Growth Prospects for Avinger, Inc.
Growth opportunities for Avinger, Inc. are driven by several key factors, including product innovations, market expansions, and strategic partnerships.
Product Innovations
Avinger has focused on advancing its product line, particularly with the development of its Tigereye ST and Pantheris LV devices. These innovations are expected to enhance procedural efficacy in peripheral artery disease treatments, which could significantly increase market adoption.
Market Expansions
The company aims to expand its presence in both domestic and international markets. As of September 30, 2024, Avinger reported revenues of $5.4 million for the nine months ended September 30, 2024, a decrease of 7% compared to $5.7 million in the same period of 2023. The strategic decision to focus on existing markets rather than expanding into new ones has been a pivotal part of their approach, but future growth may hinge on re-entering peripheral markets more aggressively.
Acquisitions and Strategic Partnerships
In March 2024, Avinger entered a strategic collaboration with Zylox-Tonbridge Medical Technology Co., Ltd., which included an investment of $7.5 million. The partnership aims to enhance product development and market reach, potentially unlocking new revenue streams.
Future Revenue Growth Projections and Earnings Estimates
Analysts project a gradual recovery in revenues as product launches gain traction. The total revenues were $10.1 million in 2021, $8.3 million in 2022, and $7.7 million in 2023. Forecasts for 2024 suggest that with new product introductions and enhanced sales strategies, revenues may stabilize and increase, contingent upon effective execution of their strategic initiatives.
Competitive Advantages
Avinger’s competitive advantages include a specialized focus on proprietary technologies that differentiate its products from competitors. The company has assembled a team with extensive experience in medical device development, which positions it well to capitalize on market opportunities. A strong existing customer base and established relationships with healthcare providers also provide a solid foundation for growth.
| Year | Revenue ($ millions) | Net Loss ($ millions) | Gross Margin (%) |
|---|---|---|---|
| 2021 | 10.1 | (13.3) | 28 |
| 2022 | 8.3 | (18.3) | 28 |
| 2023 | 7.7 | (17.6) | 28 |
| 2024 (Projected) | 5.4 | (13.6) | 21 |
The company also reported cash and cash equivalents of $5.9 million as of September 30, 2024. This liquidity, combined with ongoing revenue from existing products and potential new offerings, supports Avinger’s growth strategy moving forward.
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Updated on 16 Nov 2024
Resources:
- Avinger, Inc. (AVGR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Avinger, Inc. (AVGR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Avinger, Inc. (AVGR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.