Nano-x (NNOX) Fundamental Analysis

What the company does: Nano-X is a medical imaging technology company whose goal is to create more affordable and available medical imaging systems. They believe that their new class of affordable medical imaging systems can aid in the early detection of medical conditions that are discoverable by X-ray. To do this they have been developing an X-ray source that is created using a digital MEMs semiconductor cathode that they believe to achieve the same functionality as legacy X-ray analog cathodes. Legacy X-rays require large amounts of electrical energy to function, this creates a significant amount of heat that requires complex mechanical systems to cool down. This leads to high costs and complexity to existing medical imaging systems, limiting the availability and affordability of these systems. To solve this problem, they are integrating their digital X-ray source technology into their own product; The Nanox.ARC. If given FDA approval, they believe it will cost less to manufacture compared to the legacy analog X-ray source systems, allowing them to increase the availability and accessibility of these systems. In addition to the hardware, they will be providing a cloud-based MSaaS platform alongside the Nanox-ARC called Nanox.CLOUD. This platform will allow for faster access to human radiology expects as well as a decision assistive AI algorithm to provide scan reviews and diagnostics in a shorter time frame, allowing for reduced wait-times for imaging results.   To increase the availability of medical imaging, they plan to sell units on a pay-per-scan pricing structure, allowing for a more affordable scan price and possibly commoditizing medical imaging services to a larger population. Why I believe it is undervalued: From my projections, all else equals, if this company will become profitable if it achieves 15000 unit sales by 2024 goal, For my projections I only included revenue from their subscription service model which does not include revenue from Nanox.CLOUD or direct sales of the Nanox.ARC. This means that when considering other forms of revenue, it is possible for this company to reach profitability a year earlier at the projected numbers. In addition at these prices right now, the company has a P/E ratio of $35.89, due to the average P/E ratio of technology companies in the market, I believe the market will value this company with a P/E of $60, that with an EPS of $1.55 by 2024 from only subscription revenue, this company would have a market value of $93 per share in 2024. With this valuation, this investment has a rate of return of 37%, which beats the average return of the market. Risk factors: Although promising, this is a very high-risk/ high reward investment. Some highlighted risks being: -Although they received FDA approval on their single-stage version of the product, to be on track to meet my projections as well as start producing and selling units they must get FDA approval for their multi-stage Nanox-ARC device. - Two of their sources of revenue are strongly reliant on the successful commercial application of their Nanox.CLOUD platform, which is subject to many risks and uncertainties. - They must achieve market-wide acceptance for their product and services, with it being never done before and a new player in the X-ray space, it is highly suspectable to never being adopted and failing. - Even if accepted, if they cannot sell enough units, it will reduce the return on investment due to their inability to meet revenue expectations and reduce its valuation. Competitors:  General Electric, Siemens, Philips, Hologic, Varian, Fuji, Toshiba, and Hitachi. -These companies currently dominate the medical imaging market, they would have to get market-wide acceptance and adaptation of their technology to be able to take market share. Nano-x aims to form alliances with many of these companies, mainly through licensing the technology.  They also anticipate Digital healthcare disruptors such as cloud computing companies or IT companies may enter the market but they believe they can partner up with these companies through their subscription business model. 

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Danito

Apr 27, 2021

-34.47%

Change % Since Posting

35.89

Price When Posted

-12.37

Change Since Posting

NNOX

Nano X Imaging Ltd

23.52

1.06
4.72%
Current Price

Nano-x (NNOX) Fundamental Analysis

bullish

What the company does:

Nano-X is a medical imaging technology company whose goal is to create more affordable and available medical imaging systems. They believe that their new class of affordable medical imaging systems can aid in the early detection of medical conditions that are discoverable by X-ray. To do this they have been developing an X-ray source that is created using a digital MEMs semiconductor cathode that they believe to achieve the same functionality as legacy X-ray analog cathodes.

Legacy X-rays require large amounts of electrical energy to function, this creates a significant amount of heat that requires complex mechanical systems to cool down. This leads to high costs and complexity to existing medical imaging systems, limiting the availability and affordability of these systems. To solve this problem, they are integrating their digital X-ray source technology into their own product; The Nanox.ARC. If given FDA approval, they believe it will cost less to manufacture compared to the legacy analog X-ray source systems, allowing them to increase the availability and accessibility of these systems. In addition to the hardware, they will be providing a cloud-based MSaaS platform alongside the Nanox-ARC called Nanox.CLOUD. This platform will allow for faster access to human radiology expects as well as a decision assistive AI algorithm to provide scan reviews and diagnostics in a shorter time frame, allowing for reduced wait-times for imaging results.  

To increase the availability of medical imaging, they plan to sell units on a pay-per-scan pricing structure, allowing for a more affordable scan price and possibly commoditizing medical imaging services to a larger population.

Why I believe it is undervalued:

From my projections, all else equals, if this company will become profitable if it achieves 15000 unit sales by 2024 goal, For my projections I only included revenue from their subscription service model which does not include revenue from Nanox.CLOUD or direct sales of the Nanox.ARC. This means that when considering other forms of revenue, it is possible for this company to reach profitability a year earlier at the projected numbers. In addition at these prices right now, the company has a P/E ratio of $35.89, due to the average P/E ratio of technology companies in the market, I believe the market will value this company with a P/E of $60, that with an EPS of $1.55 by 2024 from only subscription revenue, this company would have a market value of $93 per share in 2024. With this valuation, this investment has a rate of return of 37%, which beats the average return of the market.

Risk factors:

Although promising, this is a very high-risk/ high reward investment. Some highlighted risks being:

-Although they received FDA approval on their single-stage version of the product, to be on track to meet my projections as well as start producing and selling units they must get FDA approval for their multi-stage Nanox-ARC device.

- Two of their sources of revenue are strongly reliant on the successful commercial application of their Nanox.CLOUD platform, which is subject to many risks and uncertainties.

- They must achieve market-wide acceptance for their product and services, with it being never done before and a new player in the X-ray space, it is highly suspectable to never being adopted and failing.

- Even if accepted, if they cannot sell enough units, it will reduce the return on investment due to their inability to meet revenue expectations and reduce its valuation.

Competitors: 

General Electric, Siemens, Philips, Hologic, Varian, Fuji, Toshiba, and Hitachi.

-These companies currently dominate the medical imaging market, they would have to get market-wide acceptance and adaptation of their technology to be able to take market share.

Nano-x aims to form alliances with many of these companies, mainly through licensing the technology. 

They also anticipate Digital healthcare disruptors such as cloud computing companies or IT companies may enter the market but they believe they can partner up with these companies through their subscription business model. 

 
 
 
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49.17

Target Price

8/ 10

Confidence

6-12 Months

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