Iridex Corp (NASDAQ: IRIX)

Sector: Healthcare Industry: Medical Devices CIK: 0001006045
Market Cap 22.38 Mn
P/B 4.78
P/E -4.40
P/S 0.44
ROIC (Qtr) -29.78
Div Yield % 0.00
Rev 1y % (Qtr) 7.80
Total Debt (Qtr) 4.79 Mn
Debt/Equity (Qtr) 1.02
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About

Iridex Corporation, commonly known as IRIX, is a prominent player in the ophthalmic medical technology industry, specializing in the development and commercialization of innovative products and procedures for treating sight-threatening eye conditions, such as glaucoma and retinal diseases. The company's proprietary MicroPulse Technology and Endpoint Management Technology are integral to its offerings for glaucoma and retina disorders. Headquartered in the United States, Iridex operates in the global medical technology market, focusing on ophthalmology....

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Investment thesis

Bull case

  • Healthy cash reserves of 5.57M provide 5.42x coverage of short-term debt 1.03M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 26.32M provides 5.50x coverage of total debt 4.79M, indicating robust asset backing and low credit risk.
  • Operating cash flow of (3.94M) fully covers other non-current liabilities (1.89M) by 2.08x, showing strong long-term stability.
  • R&D investment of 3.83M represents healthy 0.41x of deferred revenue 9.42M, indicating strong future innovation pipeline.
  • Tangible assets of 26.32M provide robust 2.12x coverage of current liabilities 12.39M, showing strong asset backing.

Bear case

  • Investment activities of (46000) provide weak support for R&D spending of 3.83M, which is -0.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (3.94M) provides insufficient coverage of deferred revenue obligations of 9.42M, which is -0.42x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (3.94M) shows concerning coverage of stock compensation expenses of 878000, with a -4.49 ratio indicating potential earnings quality issues.
  • Free cash flow of (3.99M) provides weak coverage of capital expenditures of 46000, with a -86.70 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (3.94M) provides minimal -127.16x coverage of tax expenses of 31000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

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 0.73 2.13
EV to Cash from Ops. EV/CFO -5.24 2.75
EV to Debt EV to Debt 4.32 17.25
EV to EBIT EV/EBIT -4.09 2.89
EV to EBITDA EV/EBITDA -13.29 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF -5.18 29.36
EV to Market Cap EV to Market Cap 0.92 25.09
EV to Revenue EV/Rev 0.41 32.80
Price to Book Value [P/B] P/B 4.78 4.73
Price to Earnings [P/E] P/E -4.40 -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) 0.00 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -264.29 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 44.38 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 53.91 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 82.82 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 53.62 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) 53.62 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) 55.22 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 43.01 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.85 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.79 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.45 1.80
Current Ratio Curr Ratio (Qtr) 1.94 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 1.02 1.20
Interest Cover Ratio Int Coverage (Qtr) 0.00 196.93
Times Interest Earned Times Interest Earned (Qtr) 0.00 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -7.00 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) -9.98 -2,478.60
EBT Margin % EBT Margin % (Qtr) -9.98 -2,690.42
Gross Margin % Gross Margin % (Qtr) 38.20 30.80
Net Profit Margin % Net Margin % (Qtr) -10.00 -2,821.53