Myomo, Inc. (MYO) Bundle
Understanding Myomo, Inc. (MYO) Revenue Streams
Understanding Myomo, Inc.’s Revenue Streams
Myomo, Inc. primarily generates revenue through the sale of medical devices designed for neuromuscular disorders. The company's revenue is derived from multiple sources, primarily categorized into direct sales to patients and sales through clinical and medical providers.
Revenue Breakdown
The following table illustrates the revenue breakdown from different sources for the three and nine months ended September 30, 2024, compared to the same periods in 2023:
| Revenue Source | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Direct to Patient | $7,431,751 | $3,501,958 | $15,491,584 | $9,245,345 |
| Clinical/Medical Providers | $1,775,835 | $1,527,565 | $4,991,158 | $3,474,510 |
| License Revenue | $0 | $50,000 | $0 | $1,764,920 |
| Total Revenue | $9,207,586 | $5,079,523 | $20,482,742 | $14,484,775 |
Year-over-Year Revenue Growth Rate
The total revenue for the three months ended September 30, 2024, increased by approximately 81% compared to the same period in 2023. For the nine months ended September 30, 2024, the increase was approximately 41% year-over-year.
Product revenue specifically saw an increase of approximately 83% and 61% for the three and nine months ended September 30, 2024, respectively, highlighting a significant growth trajectory driven by an increase in units delivered, particularly to Medicare Part B patients.
Contribution of Different Business Segments to Overall Revenue
For the three months ended September 30, 2024, direct sales to patients constituted approximately 81% of total revenue, indicating a strong focus on this distribution channel. The clinical and medical providers contributed approximately 19% of total revenue during the same period.
Analysis of Significant Changes in Revenue Streams
In 2024, the company began providing its MyoPro device to Medicare Part B patients, significantly impacting revenue streams. The successful reimbursement from CMS and higher average selling prices have contributed to the overall revenue growth. Additionally, the absence of license revenue in 2024 compared to the previous year reflects a strategic shift towards direct sales.
The geographic distribution of revenue also shifted, with 88% of total revenue generated from the United States and 12% from Germany for the three months ended September 30, 2024. This marks an increase from 78% from the U.S. and 3% from Germany in the same period of 2023.
The following table summarizes the revenue growth and contributions from different segments:
| Period | Total Revenue | Year-over-Year Growth | Direct to Patient Contribution | Clinical/Medical Providers Contribution |
|---|---|---|---|---|
| Three Months Ended September 30, 2024 | $9,207,586 | 81% | 81% | 19% |
| Nine Months Ended September 30, 2024 | $20,482,742 | 41% | 76% | 24% |
A Deep Dive into Myomo, Inc. (MYO) Profitability
A Deep Dive into Myomo, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, total revenue was $9,207,586 with a gross profit of $6,945,555, resulting in a gross margin of 75.4%. For the nine months ended September 30, 2024, total revenue reached $20,482,742 and gross profit was $14,570,110, with a gross margin of 71.1%.
The operating loss for the three months ended September 30, 2024, was ($957,553), while for the nine months, the operating loss was ($5,961,384). The net loss for the three months ended September 30, 2024, was ($966,409), and for the nine months, it was ($5,923,648).
Trends in Profitability Over Time
Over the last year, the company has seen significant growth in revenue. Total revenue increased by approximately $4,128,100 (or 81%) for the three months ended September 30, 2024, compared to the same period in 2023. For the nine months, the increase was $5,998,000 (or 41%) year-over-year. The gross profit for the three months increased by $3,456,707 (or 99%), while for the nine months, it rose by $4,492,605 (or 45%) year-over-year.
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the company's gross margin of 75.4% is significantly higher than the industry average of approximately 50-60% for medical devices. The operating loss margin stands at (10.4%) for the three-month period, whereas the medical device industry often reports operating profit margins of 10-20%.
Analysis of Operational Efficiency
Cost management has shown improvement, with the cost of revenue for the three months ended September 30, 2024, being $2,262,031, which is a 42% increase from the prior year. This increase in cost is attributed to higher manufacturing overhead as the company expands its capacity. The gross margin trend indicates a recovery from 68.7% in 2023 to 75.4% in 2024 for the same quarter.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $9,207,586 | $5,079,523 | +81% |
| Gross Profit | $6,945,555 | $3,488,848 | +99% |
| Gross Margin | 75.4% | 68.7% | +6.7% |
| Operating Loss | ($957,553) | ($2,024,369) | -52% |
| Net Loss | ($966,409) | ($2,029,016) | -52% |
The company has also reported a significant increase in operational efficiency, reflected in the decrease of the operating loss by 52% for the three months ended September 30, 2024, compared to the same period in 2023.
Debt vs. Equity: How Myomo, Inc. (MYO) Finances Its Growth
Debt vs. Equity: How Myomo, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, Myomo, Inc. reported total liabilities of $7,020,537, including current liabilities of $6,991,372 and non-current operating lease liabilities of $29,165. The company has not drawn from its line of credit of up to $4 million, which remains undrawn as of the latest reporting date, although approximately $0.9 million is available to be drawn.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure of financial leverage. As of September 30, 2024, Myomo's stockholders' equity stood at $9,292,334. This results in a debt-to-equity ratio of approximately 0.76, calculated as follows:
- Debt-to-Equity Ratio = Total Liabilities / Stockholders' Equity
- Debt-to-Equity Ratio = $7,020,537 / $9,292,334 ≈ 0.76
This ratio is relatively conservative compared to industry standards, where the average debt-to-equity ratio for similar companies typically ranges from 0.5 to 1.5.
Recent Debt Issuances
On July 11, 2024, Myomo entered into a Loan and Security Agreement with Silicon Valley Bank, allowing for borrowing against eligible accounts receivable. As of September 30, 2024, the company had recorded approximately $199,500 in debt issuance costs associated with this agreement.
Equity Funding
Myomo has actively pursued equity funding to support its operations. In January 2024, the company completed a registered direct offering of 1,354,218 shares of common stock and 224,730 pre-funded warrants at $3.80 per share, generating net proceeds of approximately $5.4 million. Previous offerings in 2023 yielded approximately $3.9 million and $5.7 million from public equity sales.
Balance Between Debt and Equity Financing
Myomo has strategically balanced its financing methods. The combination of $5.4 million from the recent equity offering and the potential $4 million line of credit allows the company to maintain liquidity while reducing reliance on debt. The total stockholders' equity has increased to $9,292,334 as of September 30, 2024, reflecting a proactive approach to equity financing.
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $7,020,537 |
| Current Liabilities | $6,991,372 |
| Non-current Liabilities | $29,165 |
| Stockholders' Equity | $9,292,334 |
| Debt-to-Equity Ratio | 0.76 |
| Line of Credit Available | $0.9 million |
| Recent Equity Offering Proceeds | $5.4 million |
Assessing Myomo, Inc. (MYO) Liquidity
Assessing Myomo, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $14,704,144 | $6,991,372 | 2.10 |
The current ratio of 2.10 indicates a strong liquidity position, suggesting that the company can cover its short-term obligations comfortably.
Quick Ratio: The quick ratio is derived from current assets minus inventories, divided by current liabilities:
| Current Assets (Excluding Inventories) | Current Liabilities | Quick Ratio |
|---|---|---|
| $11,320,631 | $6,991,372 | 1.62 |
The quick ratio of 1.62 further emphasizes the company's ability to meet short-term liabilities without relying on inventory sales.
Analysis of Working Capital Trends
The working capital as of September 30, 2024, stands at:
| Working Capital | Change from Previous Period |
|---|---|
| $7,712,772 | -5.6% |
The decrease in working capital from the previous year indicates a potential tightening of liquidity, although the company remains in a favorable position overall.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, shows the following trends:
| Cash Flow from Operating Activities | Cash Flow from Investing Activities | Cash Flow from Financing Activities |
|---|---|---|
| $(6,655,632) | $1,613,180 | $5,162,409 |
The negative cash flow from operating activities of $(6,655,632) highlights ongoing operational challenges, while investing and financing activities provide some offset.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents amount to:
| Cash and Cash Equivalents | Short-Term Investments | Total Liquidity |
|---|---|---|
| $6,622,675 | $0 | $6,622,675 |
The total liquidity of $6,622,675 indicates a reasonable buffer, although the absence of short-term investments may pose a concern for immediate liquidity needs.
Furthermore, the company has an accumulated deficit of approximately $102.85 million, which, coupled with historical net losses, raises concerns about long-term solvency.
Overall, while the liquidity ratios suggest that the company is currently positioned to meet its short-term obligations, the ongoing cash burn from operations and accumulated losses may present future challenges if revenue growth does not accelerate.
Is Myomo, Inc. (MYO) Overvalued or Undervalued?
Valuation Analysis
As of 2024, the valuation metrics for the company reveal critical insights into whether the stock is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at N/A due to the company reporting a net loss in recent periods. The net loss per share attributable to common stockholders for the nine months ended September 30, 2024, was $(0.16).
Price-to-Book (P/B) Ratio
The company's book value per share as of September 30, 2024, is calculated as follows:
- Total Stockholders’ Equity: $9,292,334
- Number of Shares Outstanding: 30,244,182
- Book Value per Share: $0.31
Given the current stock price of approximately $3.80, the P/B ratio is 12.26.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value is calculated as follows:
- Market Capitalization: $114,919,903 (based on 30,244,182 shares at $3.80)
- Total Liabilities: $7,020,537
- Cash and Cash Equivalents: $6,622,675
- Enterprise Value: $115,317,765
For the nine months ended September 30, 2024, Adjusted EBITDA was $(5,294,458), resulting in an EV/EBITDA ratio of N/A due to negative EBITDA.
Stock Price Trends
Over the last 12 months, the stock price has shown considerable fluctuation:
- 12-month high: $4.50
- 12-month low: $1.75
- Current stock price: $3.80
Dividend Yield and Payout Ratios
As of 2024, the company does not pay any dividends, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
According to recent analyst ratings:
- Buy: 2
- Hold: 3
- Sell: 1
The consensus indicates a mixed outlook, with a majority recommending to hold the stock.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 12.26 |
| EV/EBITDA Ratio | N/A |
| 12-month High | $4.50 |
| 12-month Low | $1.75 |
| Current Stock Price | $3.80 |
| Dividend Yield | 0% |
| Analyst Consensus (Buy) | 2 |
| Analyst Consensus (Hold) | 3 |
| Analyst Consensus (Sell) | 1 |
Key Risks Facing Myomo, Inc. (MYO)
Key Risks Facing Myomo, Inc.
The financial health of the company is influenced by various internal and external risk factors that could impact its operations and profitability.
Industry Competition
The market for myoelectric braces is relatively new, leading to uncertainties regarding the rate of adoption. The company relies heavily on the sales of its MyoPro products, which face competition from alternative technologies and treatment methods, including rehabilitation therapy and traditional prosthetics. A failure to achieve sufficient market acceptance could adversely affect revenue growth.
Regulatory Changes
Regulations governing the design, development, and marketing of medical devices are stringent. Any failure to comply could lead to product recalls or market withdrawal. Recent changes by the Centers for Medicare & Medicaid Services (CMS) regarding reimbursement policies pose a significant risk, as approximately 55% and 44% of product revenues for the three and nine months ended September 30, 2024, respectively, were derived from Medicare Part B patients.
Market Conditions
Adverse changes in reimbursement policies from payers, including CMS, could negatively impact revenue. In 2024, revenues from Medicare Advantage insurance plans accounted for approximately 24% and 27% of product revenues for the three and nine months ended September 30, 2024, respectively. Furthermore, if CMS retracts or restricts coverage requirements, it could result in significant revenue losses.
Operational Risks
The company has a history of operational losses, reporting a net loss of approximately $5.9 million for the nine months ended September 30, 2024, compared to a net loss of $5.7 million for the same period in the previous year. Additionally, the company has an accumulated deficit of approximately $102.8 million as of September 30, 2024. The reliance on a limited number of payers for revenue, with CMS representing 68% and 58% of direct billing revenues for the three and nine months ended September 30, 2024, respectively, increases vulnerability to changes in payer policies.
Financial Risks
Cash flow remains a concern, with cash used in operating activities amounting to approximately $6.66 million for the nine months ended September 30, 2024. The company's cash and cash equivalents stood at approximately $6.9 million as of September 30, 2024, supported by a Loan and Security Agreement allowing borrowing of up to $4 million against eligible accounts receivable.
Mitigation Strategies
The company has initiated several strategies to mitigate risks, including expanding its sales and marketing efforts, increasing investments in international markets, and focusing on developing new product lines such as the pediatric version of the MyoPro. The company also aims to achieve operating cash flow breakeven by the fourth quarter of 2024.
| Risk Factor | Description | Impact on Revenue |
|---|---|---|
| Industry Competition | New market with uncertain adoption rates | Potential decline in sales |
| Regulatory Changes | Changes in reimbursement policies by CMS | Loss of Medicare revenue |
| Market Conditions | Dependence on a few major payers | Vulnerability to payer policy changes |
| Operational Risks | Continued operational losses | Increased pressure on cash flow |
| Financial Risks | Limited cash reserves and high burn rate | Need for additional capital |
Future Growth Prospects for Myomo, Inc. (MYO)
Future Growth Prospects for Myomo, Inc.
Key Growth Drivers
The primary growth drivers for the company include:
- Product Innovations: The development of new products, including a pediatric version of the MyoPro, the MyoPal, is expected to expand the customer base.
- Market Expansions: Increased focus on international markets, particularly Germany and China, aims to capture a larger share of the global market.
- Acquisitions: Strategic acquisitions may enhance product offerings and market reach.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections for 2024 indicate a significant increase:
- Revenue for the three months ended September 30, 2024: $9,207,586, up from $5,079,523 in 2023—an increase of 81%.
- Revenue for the nine months ended September 30, 2024: $20,482,742, up from $14,484,775 in 2023—an increase of 41%.
Product revenue alone for the nine months ended September 30, 2024, reached $20,482,742, reflecting a 61% increase compared to the previous year.
Strategic Initiatives or Partnerships
Recent strategic partnerships and initiatives include:
- Collaboration with Ryzur Medical to manufacture and sell products in Greater China, generating an upfront license fee of $2.7 million.
- Focus on obtaining reimbursements from insurance companies to facilitate product accessibility.
Competitive Advantages
The company’s competitive advantages include:
- High Gross Margin: Gross margin was 75.4% for the three months ended September 30, 2024, compared to 68.7% in 2023.
- Established Relationships with Payers: 68% of direct billing revenues in 2024 came from CMS, ensuring a stable revenue stream.
- Strong Product Demand: Increased deliveries to Medicare Part B patients have driven higher product revenues.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $9,207,586 | $5,079,523 | +81% |
| Product Revenue | $9,207,586 | $5,029,523 | +83% |
| Gross Margin | 75.4% | 68.7% | +6.7% |
| Net Loss | ($966,409) | ($2,029,016) | -52% |
As of September 30, 2024, the company reported a working capital of $7,712,772 and stockholders’ equity of $9,292,334.
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Resources:
- Myomo, Inc. (MYO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Myomo, Inc. (MYO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Myomo, Inc. (MYO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.