Penumbra Inc (NYSE: PEN)

Sector: Healthcare Industry: Medical Devices CIK: 0001321732
Market Cap 13.22 Bn
P/B 9.73
P/E 80.62
P/S 9.91
ROIC (Qtr) 9.80
Div Yield % 0.00
Rev 1y % (Qtr) 17.82
Total Debt (Qtr) 217.05 Mn
Debt/Equity (Qtr) 0.16
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About

Penumbra Inc., a prominent player in the global healthcare industry, is dedicated to developing innovative therapies that address challenging medical conditions in markets with significant unmet needs. The company's operations span across various business activities, including the development, manufacturing, and marketing of specialized products for healthcare providers and physicians. Penumbra's revenue generation is primarily driven by the sale of its thrombectomy, embolization, and access products, as well as its immersive healthcare products....

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Investment thesis

Bull case

  • Strong operating cash flow of 203.29M provides robust 0.94x coverage of total debt 217.04M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 321.03M provide 20.70x coverage of short-term debt 15.51M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.57B provides 7.24x coverage of total debt 217.04M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 152.62M exceeds capital expenditure of 50.67M by 3.01x, indicating strong organic growth funding capability.
  • Short-term investments of 149.27M provide solid 1.20x coverage of other current liabilities 124.27M, indicating strong liquidity.

Bear case

  • Operating cash flow of 203.29M barely covers its investment activities of (189.90M), with a coverage ratio of -1.07, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (189.90M) provide weak support for R&D spending of 87.98M, which is -2.16x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 203.29M shows concerning coverage of stock compensation expenses of 56.05M, with a 3.63 ratio indicating potential earnings quality issues.
  • Free cash flow of 152.62M represents just -60.93x of debt issuance (2.50M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • R&D investment of 87.98M represents just 0.14x of SG&A expenses of 630.26M, indicating potential underinvestment in innovation relative to administrative overhead.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

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 7.47 2.13
EV to Cash from Ops. EV/CFO 64.06 2.75
EV to Debt EV to Debt 60.00 17.25
EV to EBIT EV/EBIT 70.08 2.89
EV to EBITDA EV/EBITDA 68.47 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 85.33 29.36
EV to Market Cap EV to Market Cap 0.98 25.09
EV to Revenue EV/Rev 9.76 32.80
Price to Book Value [P/B] P/B 9.73 4.73
Price to Earnings [P/E] P/E 80.62 -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) -160.41 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 14.46 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 374.79 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 582.02 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 1,165.20 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) 1,165.20 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) 370.00 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 13.75 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 21.85 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.76 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.89 1.80
Current Ratio Curr Ratio (Qtr) 6.73 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.16 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) 15.20 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) 13.93 -2,478.60
EBT Margin % EBT Margin % (Qtr) 13.93 -2,690.42
Gross Margin % Gross Margin % (Qtr) 66.80 30.80
Net Profit Margin % Net Margin % (Qtr) 12.30 -2,821.53