Envoy Medical, Inc. (NASDAQ: COCH)

Sector: Healthcare Industry: Medical Devices CIK: 0001840877
Market Cap 13.90 Mn
P/B -1.81
P/E -0.49
P/S 66.84
ROIC (Qtr) 527.30
Div Yield % 0.00
Rev 1y % (Qtr) -25.00
Total Debt (Qtr) 946,000.00
Debt/Equity (Qtr) -0.12
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About

Envoy Medical, Inc., a company operating in the hearing health industry, is dedicated to providing innovative medical technologies that cater to the hearing loss spectrum. The company's journey began in 1995 with the ambition of creating a fully implanted hearing device that harnesses the natural ear to pick up sound. However, it was the Acclaim CI, a fully implanted cochlear implant, that became the company's primary focus after their initial product, the Esteem FI-AMEI, failed to gain commercial traction. The Acclaim CI operates differently from...

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Investment thesis

Bull case

  • Healthy cash reserves of 3.56M provide 21.17x coverage of short-term debt 168000, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of (16.38M) exceeds capital expenditure of (527000) by 31.08x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 8.18M provides 8.65x coverage of total debt 946000, indicating robust asset backing and low credit risk.
  • Retained earnings of (305.66M) represent substantial 39.90x of equity (7.66M), indicating strong internal capital generation.
  • Operating cash flow of (16.90M) provides strong 32.08x coverage of capital expenditure (527000), enabling organic growth.

Bear case

  • Operating cash flow of (16.90M) barely covers its investment activities of 527000, with a coverage ratio of -32.08, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 527000 provide weak support for R&D spending of 10.40M, which is 0.05x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (16.90M) shows concerning coverage of stock compensation expenses of 783000, with a -21.59 ratio indicating potential earnings quality issues.
  • Operating earnings of (19.81M) show weak coverage of depreciation charges of 270000, with a -73.39 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (16.38M) represents just -1.23x of debt issuance 13.35M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Medical Devices
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ABT Abbott Laboratories 173.80 Bn 32.73 5.47 12.94 Bn
2 SYK Stryker Corp 141.15 Bn 43.48 5.62 15.86 Bn
3 MDT Medtronic plc 123.47 Bn 25.92 3.55 29.10 Bn
4 BSX Boston Scientific Corp 112.80 Bn 38.92 5.62 11.44 Bn
5 EW Edwards Lifesciences Corp 45.66 Bn 33.38 7.76 0.70 Bn
6 DXCM Dexcom Inc 27.52 Bn 32.91 5.90 1.34 Bn
7 STE STERIS plc 24.13 Bn 34.08 4.14 2.05 Bn
8 PODD Insulet Corp 17.33 Bn 70.38 6.87 1.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.58 2.13
EV to Cash from Ops. EV/CFO -2.22 2.75
EV to Debt EV to Debt 39.59 17.25
EV to EBIT EV/EBIT -1.89 2.89
EV to EBITDA EV/EBITDA -1.86 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF -2.29 29.36
EV to Market Cap EV to Market Cap 2.69 25.09
EV to Revenue EV/Rev 180.04 32.80
Price to Book Value [P/B] P/B -1.81 4.73
Price to Earnings [P/E] P/E -0.49 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -4.19 40.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.59
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.37
Interest Coverage Int. cover (Qtr) -10.04 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 134.33 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -19.62 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.00 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.26 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 4.00 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) -3.40 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) -21.37 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 35.87 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -13.12 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.40 1.80
Current Ratio Curr Ratio (Qtr) 0.64 4.18
Debt to Equity Ratio Debt/Equity (Qtr) -0.12 1.20
Interest Cover Ratio Int Coverage (Qtr) -10.04 196.93
Times Interest Earned Times Interest Earned (Qtr) -10.04 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -9,396.20 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) -9,525.96 -2,478.60
EBT Margin % EBT Margin % (Qtr) -10,475.00 -2,690.42
Gross Margin % Gross Margin % (Qtr) -294.20 30.80
Net Profit Margin % Net Margin % (Qtr) -13,755.30 -2,821.53