LENSAR, Inc. (LNSR) Bundle
Understanding LENSAR, Inc. (LNSR) Revenue Streams
Understanding LENSAR, Inc.’s Revenue Streams
The revenue analysis of LENSAR, Inc. reveals a significant growth trajectory in recent periods, driven primarily by its advanced ALLY System.
Breakdown of Primary Revenue Sources
For the three months ended September 30, 2024, the revenue breakdown is as follows:
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Year-over-Year Growth (%) |
|---|---|---|---|
| Product Revenue | $10,578 | $7,156 | 48% |
| Lease Revenue | $1,724 | $1,524 | 13% |
| Service Revenue | $1,237 | $1,115 | 11% |
| Total Revenue | $13,539 | $9,795 | 38% |
For the nine months ended September 30, 2024, the revenue breakdown is:
| Revenue Source | 9M 2024 Revenue (in thousands) | 9M 2023 Revenue (in thousands) | Year-over-Year Growth (%) |
|---|---|---|---|
| Product Revenue | $27,545 | $22,191 | 24% |
| Lease Revenue | $5,623 | $4,844 | 16% |
| Service Revenue | $3,595 | $3,024 | 19% |
| Total Revenue | $36,763 | $30,059 | 22% |
Year-over-Year Revenue Growth Rate
The total revenue increased by 38% for Q3 2024 compared to Q3 2023, from $9.8 million to $13.5 million. For the nine-month period, total revenue grew by 22%, from $30.1 million to $36.8 million.
Contribution of Different Business Segments to Overall Revenue
In Q3 2024, product revenue accounted for approximately 78% of total revenue, while lease and service revenues contributed 13% and 9%, respectively. For the nine months ended September 30, 2024, product revenue represented about 75% of total revenue.
Analysis of Significant Changes in Revenue Streams
The increase in product revenue is attributable to the sale of the ALLY System, which saw a notable rise in sales volume. Specifically, there were 11 systems sold internationally following regulatory approvals in the EU and Taiwan. Service revenue also reflected growth, driven by an increase in procedure volume, which rose by $4.2 million for the nine months ended September 30, 2024.
Overall, the analysis indicates a robust increase in revenue driven by improved sales of the ALLY System and an expanding installed base, which stood at approximately 355 systems as of September 30, 2024.
A Deep Dive into LENSAR, Inc. (LNSR) Profitability
A Deep Dive into LENSAR, Inc.'s Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 46.1%, compared to 50.0% for the same period in 2023. For the nine months ended September 30, 2024, the gross profit margin was 51.0%, down from 53.1% in 2023.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024 was ($1.245 million), resulting in an operating profit margin of (9.2%). For the nine months ended September 30, 2024, the operating loss was ($9.375 million), with an operating profit margin of (25.5%).
Net Profit Margin: The net loss for the three months ended September 30, 2024 was ($1.502 million), leading to a net profit margin of (11.1%). For the nine months ended September 30, 2024, the net loss was ($12.702 million), resulting in a net profit margin of (34.5%).
Trends in Profitability Over Time
The company has shown fluctuations in profitability metrics over the past year. The gross profit margin decreased from 50.0% in Q3 2023 to 46.1% in Q3 2024. The net profit margin also fell from 26.2% in the nine months ended September 30, 2023 to (34.5%) in the same period of 2024, indicating a decline in overall profitability.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the industry average gross profit margin for medical device companies is approximately 67%. The operating profit margin averages around 20% within the same sector. This comparison highlights LENSAR's challenges in maintaining competitive profitability ratios.
Analysis of Operational Efficiency
The company has faced increased costs, particularly in product revenue, where the cost of revenue for the three months ended September 30, 2024 was $7.273 million, up from $4.918 million in 2023. This increase is attributed to higher sales volumes of lower-margin products. The operational efficiency can be assessed through the following table:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $13.539 million | $9.795 million | $36.763 million | $30.059 million |
| Cost of Revenue | $7.273 million | $4.918 million | $18.020 million | $14.101 million |
| Gross Profit | $6.266 million | $4.877 million | $18.743 million | $15.958 million |
| Operating Loss | ($1.245 million) | ($2.040 million) | ($9.375 million) | ($9.268 million) |
| Net Loss | ($1.502 million) | $2.568 million | ($12.702 million) | ($10.457 million) |
Overall, while revenue has increased, the rising costs have adversely affected gross profit margins and contributed to ongoing net losses.
Debt vs. Equity: How LENSAR, Inc. (LNSR) Finances Its Growth
Debt vs. Equity: How LENSAR, Inc. Finances Its Growth
As of September 30, 2024, LENSAR, Inc. reported total liabilities of $25.5 million, which includes current liabilities of $11.7 million and long-term liabilities of $13.8 million.
Overview of the Company's Debt Levels
The company's debt structure comprises both short-term and long-term liabilities. Short-term debt includes accounts payable of $3.9 million and accrued liabilities of $5.8 million. Long-term operating lease liabilities amount to $1.3 million, while other long-term liabilities total $205,000.
Debt-to-Equity Ratio and Comparison to Industry Standards
LENSAR, Inc. has a debt-to-equity ratio of 1.12 as of September 30, 2024. This figure is higher than the industry average, which typically ranges around 0.5 to 0.8 for medical device companies, indicating a more leveraged position relative to its equity base.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In recent months, LENSAR has not issued any new debt but has been focusing on managing existing liabilities. The company’s credit rating has not been explicitly stated in the reports, but it is implied that the financial health is under scrutiny due to ongoing operating losses.
Balancing Between Debt Financing and Equity Funding
To finance its growth, LENSAR has utilized both debt and equity funding. The company raised $13.8 million from equity financing through the issuance of Series A Redeemable Convertible Preferred Stock. As of September 30, 2024, total stockholders’ equity stood at $22.7 million, down from $33.4 million at the end of 2023, reflecting ongoing net losses and accumulated deficits.
| Debt Type | Amount (in millions) |
|---|---|
| Current Liabilities | $11.7 |
| Long-term Liabilities | $13.8 |
| Total Liabilities | $25.5 |
| Stockholders' Equity | $22.7 |
| Debt-to-Equity Ratio | 1.12 |
Assessing LENSAR, Inc. (LNSR) Liquidity
Assessing LENSAR, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current assets totaled $39.4 million while current liabilities were $11.7 million. Thus, the current ratio is approximately 3.38.
Quick Ratio: The quick assets (current assets minus inventories) are $24.5 million (current assets of $39.4 million minus inventories of $14.9 million). Therefore, the quick ratio is approximately 2.10.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is calculated as current assets minus current liabilities, resulting in $27.7 million. This represents a decrease from the previous year, where working capital was approximately $34.8 million as of December 31, 2023.
| Period | Current Assets ($ million) | Current Liabilities ($ million) | Working Capital ($ million) |
|---|---|---|---|
| September 30, 2024 | 39.4 | 11.7 | 27.7 |
| December 31, 2023 | 46.4 | 11.6 | 34.8 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, net cash used in operating activities was $5.9 million, compared to $9.2 million for the same period in 2023. This decrease indicates an improvement in cash flow management despite ongoing losses.
Net cash used in investing activities was $4.2 million in 2024, primarily for the purchase of investments, compared to $191,000 in 2023. Financing activities provided a net cash outflow of $94,000 in 2024, down from $19.6 million in 2023 due to previous capital raises.
| Cash Flow Category | 2024 ($ million) | 2023 ($ million) |
|---|---|---|
| Operating Activities | (5.9) | (9.2) |
| Investing Activities | (4.2) | (0.2) |
| Financing Activities | (0.1) | 19.6 | Net Cash Change | (10.2) | 10.2 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had cash and cash equivalents of $10.4 million, down from $20.6 million at the end of 2023. The accumulated deficit stands at $124.6 million, indicating ongoing challenges in achieving profitability.
The significant increase in warrant liabilities to $12.3 million from $8.5 million indicates potential volatility in financial performance. The company anticipates continued operating losses and cash outflows, which could raise concerns regarding future liquidity unless additional capital is secured.
Is LENSAR, Inc. (LNSR) Overvalued or Undervalued?
Valuation Analysis
To assess whether LENSAR, Inc. (LNSR) is overvalued or undervalued, we will examine key financial metrics including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
As of the latest financial data, LENSAR reported a net loss for the nine months ended September 30, 2024, of $12.7 million compared to a net loss of $10.5 million for the same period in 2023. The basic loss per share for the nine months ended September 30, 2024, was ($1.11) while the diluted loss per share was ($1.11). Given the negative earnings, the P/E ratio is not applicable for this period.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the book value of LENSAR's total stockholders' equity was $22.738 million. With approximately 11.604 million shares outstanding, the book value per share is calculated as follows:
| Book Value | Amount |
| Book Value of Equity | $22,738,000 |
| Shares Outstanding | 11,604,000 |
| Book Value per Share | $1.96 |
Given that the current stock price is $1.20 (as of the latest trading day), the P/B ratio is:
P/B Ratio = Price per Share / Book Value per Share = $1.20 / $1.96 = 0.612
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EBITDA for the nine months ended September 30, 2024, was calculated as follows:
| EBITDA Calculation | Amount |
| Net Loss | ($12,702,000) |
| Add: Depreciation | $2,087,000 |
| Add: Amortization | $738,000 |
| EBITDA | ($10,388,000) |
With the enterprise value (EV) calculated as:
EV = Market Capitalization + Total Debt - Cash
As of September 30, 2024, cash and cash equivalents were $10,442,000. The total liabilities were $25,497,000. Assuming the market capitalization is derived from the current stock price:
Market Cap = Stock Price x Shares Outstanding = $1.20 x 11,604,000 = $13,924,800
Thus, EV = $13,924,800 + $25,497,000 - $10,442,000 = $28,979,800
Calculating the EV/EBITDA ratio:
EV/EBITDA = $28,979,800 / ($10,388,000) = -2.79
Stock Price Trends
Over the last 12 months, LENSAR's stock price has fluctuated significantly, with a high of $2.50 and a low of $0.95. The average stock price over this period is approximately $1.80.
Dividend Yield and Payout Ratio
LENSAR does not currently pay dividends, resulting in a dividend yield of 0%. The payout ratio is also not applicable due to the absence of dividends.
Analyst Consensus on Stock Valuation
As per the latest analyst ratings, the consensus on LENSAR's stock is generally a Hold with some analysts advising a Buy due to potential growth in the medical device sector, particularly with the ALLY System.
| Valuation Metric | Value |
| P/E Ratio | N/A |
| P/B Ratio | 0.612 |
| EV/EBITDA Ratio | -2.79 |
| Stock Price (current) | $1.20 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing LENSAR, Inc. (LNSR)
Key Risks Facing LENSAR, Inc. (LNSR)
As of 2024, LENSAR, Inc. faces a variety of internal and external risks that could significantly impact its financial health and operational viability.
Industry Competition
The company operates in a highly competitive medical device market. Competitors may possess longer operating histories, more established products, and greater resources, potentially limiting LENSAR's market share. The competitive landscape necessitates continuous innovation and marketing efforts to maintain and grow its position.
Regulatory Risks
LENSAR's products are subject to extensive government regulation. The failure to comply with applicable regulations could adversely affect business operations. Additionally, the company relies on regulatory approvals for its ALLY System, which has received clearance in the U.S., EU, India, and Taiwan. However, pursuing additional certifications in jurisdictions like South Korea and China may take several years, impacting growth potential.
Operational Risks
Supply chain disruptions and shortages can adversely affect the manufacturing of systems and components. The company has reported that supply chain issues have led to longer-term and more expensive contracts for inventory components, with remaining minimum purchase obligations totaling $9.3 million due within the next 18 months.
Financial Risks
For the nine months ended September 30, 2024, LENSAR recorded a net loss of $12.7 million, compared to $10.5 million for the same period in 2023. The accumulated deficit reached $124.6 million as of September 30, 2024. The company is expected to continue incurring losses as it builds its commercial and clinical infrastructure.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Competition | Pressure from established competitors with greater resources | Potential loss of market share and revenue |
| Regulatory | Compliance with government regulations; delays in approvals | Increased costs and delayed revenue recognition |
| Operational | Supply chain disruptions affecting manufacturing | Increased operational costs; potential revenue loss |
| Financial | Ongoing net losses and accumulated deficit | Increased difficulty in raising capital |
Market Conditions
The company's revenue is highly dependent on the healthcare market's willingness to adopt new technologies. Changes in reimbursement practices and patients' ability to pay for procedures can significantly affect sales. The company’s total revenue for the nine months ended September 30, 2024, was $36.8 million, a 22% increase from the previous year.
Mitigation Strategies
LENSAR has outlined several strategies to mitigate risks, including enhancing its compliance programs to meet regulatory standards, investing in research and development to innovate its product offerings, and expanding its sales and distribution networks to improve market penetration. The company also aims to maintain a strong liquidity position by managing cash flows effectively, with cash and cash equivalents reported at $10.4 million as of September 30, 2024.
Future Growth Prospects for LENSAR, Inc. (LNSR)
Future Growth Prospects for LENSAR, Inc. (LNSR)
Analysis of Key Growth Drivers
As of September 30, 2024, the company's revenue increased to $13.5 million for the three months ended September 30, 2024, up from $9.8 million for the same period in 2023, marking a growth of 38%. For the nine months ended September 30, 2024, total revenue rose to $36.8 million, compared to $30.1 million in 2023, reflecting a 22% increase. The primary drivers include increased sales of the ALLY System and higher procedure volumes.
Future Revenue Growth Projections
The future revenue growth is projected to be driven by the continued expansion of the ALLY System in both domestic and international markets. The company aims to increase its installed base of systems, which is currently approximately 355. Following regulatory certifications in regions such as the European Union and Taiwan, the company anticipates further growth in sales and procedure volumes, particularly in the $3.4 million increase in product revenue attributed to the sales of the ALLY System.
Strategic Initiatives and Partnerships
The company has executed a controlled launch of the ALLY System and is actively pursuing additional certifications in South Korea and China. The strategic focus on building a direct sales organization in the U.S. and expanding distributor networks internationally is expected to enhance market presence. As of September 30, 2024, the U.S. accounted for 52% of product revenue and 69% of service revenue.
Competitive Advantages
LENSAR's competitive advantages include its innovative ALLY System, which integrates advanced robotic technologies to improve cataract surgery efficiency. The system has received multiple regulatory approvals, positioning it as a leading option in the market. Additionally, the company benefits from a growing base of clinical evidence supporting the efficacy of its technology, which can enhance adoption rates among surgeons.
| Period | Total Revenue | Product Revenue | Service Revenue | Lease Revenue |
|---|---|---|---|---|
| Q3 2024 | $13.5 million | $10.6 million | $1.2 million | $1.7 million |
| Q3 2023 | $9.8 million | $7.2 million | $1.1 million | $1.5 million |
| 9M 2024 | $36.8 million | $27.5 million | $3.6 million | $5.6 million |
| 9M 2023 | $30.1 million | $22.2 million | $3.0 million | $4.8 million |
Conclusion
Overall, LENSAR, Inc. is well-positioned for future growth due to its innovative products, strategic market expansions, and strong revenue growth trajectory. The company continues to focus on enhancing its operational capabilities to support increased demand for the ALLY System.
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Updated on 16 Nov 2024
Resources:
- LENSAR, Inc. (LNSR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of LENSAR, Inc. (LNSR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View LENSAR, Inc. (LNSR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.