HeartSciences Inc. (NASDAQ: HSCS)

Sector: Healthcare Industry: Medical Devices CIK: 0001468492
Market Cap 3.87 Mn
P/B 0.93
P/E -0.43
P/S 446.95
ROIC (Qtr) -162.41
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 876,240.00
Debt/Equity (Qtr) 0.21
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About

Heart Test Laboratories, Inc. (HSCS) is a medical technology company that specializes in the application of artificial intelligence (AI) to electrocardiograms (ECGs) to enhance their clinical usefulness. The company's primary objective is to expand the capabilities of ECGs to detect a wider range of heart disease conditions through the development of AI-based ECG algorithms. Heart Test Laboratories generates revenue through the sale of its primary product, the MyoVista wavECG device. This device is a resting 12-lead ECG that incorporates the company's...

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Investment thesis

Bull case

  • Healthy cash reserves of 1.95M provide 3.10x coverage of short-term debt 628977, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.17M provides 4.76x coverage of total debt 876240, indicating robust asset backing and low credit risk.
  • Tangible assets of 4.17M provide robust 6.72x coverage of other current liabilities 620017, indicating strong asset backing.
  • Strong cash position of 1.95M provides 3.15x coverage of other current liabilities 620017, indicating excellent liquidity.
  • Cash reserves of 1.95M provide robust 1.25x coverage of current liabilities 1.57M, indicating strong short-term solvency.

Bear case

  • Investment activities of (40097) provide weak support for R&D spending of 3.69M, which is -0.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (7.50M) shows concerning coverage of stock compensation expenses of 762211, with a -9.84 ratio indicating potential earnings quality issues.
  • Free cash flow of (7.51M) provides weak coverage of capital expenditures of 13030, with a -576.47 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (8.21M) show weak coverage of depreciation charges of 124338, with a -66.05 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of 5.44M relative to working capital of 2.23M, which is 2.44x suggests concerning dependence on external funding for operational needs.

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 0.51 2.13
EV to Cash from Ops. EV/CFO -0.40 2.75
EV to Debt EV to Debt 3.46 17.25
EV to EBIT EV/EBIT -0.37 2.89
EV to EBITDA EV/EBITDA -0.37 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF -0.40 29.36
EV to Market Cap EV to Market Cap 0.78 25.09
EV to Revenue EV/Rev 349.43 32.80
Price to Book Value [P/B] P/B 0.93 4.73
Price to Earnings [P/E] P/E -0.43 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 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) -9.97 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 78.55 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -51.85 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.81 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.49 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.81 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) -18.52 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) 11.91 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 5.41 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -50.48 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.25 1.80
Current Ratio Curr Ratio (Qtr) 2.42 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.21 1.20
Interest Cover Ratio Int Coverage (Qtr) -9.97 196.93
Times Interest Earned Times Interest Earned (Qtr) -9.97 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -93,303.70 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) -94,737.96 -2,478.60
EBT Margin % EBT Margin % (Qtr) -104,237.92 -2,690.42
Gross Margin % Gross Margin % (Qtr) 57.90 30.80
Net Profit Margin % Net Margin % (Qtr) -104,237.90 -2,821.53