Thursday, May 9, 2024, saw Brainsway (NASDAQ:BWAY) shares receive a boost to its price target, with Oppenheimer adjusting the figure upwards to $11.00 from the previous $10.00, while maintaining an Outperform rating.
This adjustment follows Brainsway's first-quarter sales for 2024, which surpassed both the analyst's and the Street's expectations at $9.1 million, compared to the anticipated $8.8 million and $8.6 million, respectively.
The company's management has emphasized their ongoing commitment to targeting larger customer and network opportunities. Brainsway has recently secured key agreements that have expanded collaboration with large enterprise customers. The international market, particularly in South Korea and Taiwan, has been a strong performance driver for the company.
Brainsway's financial health appears to be on a positive trajectory, with the company continuing to generate positive EBITDA and cash flow. Management is optimistic that this momentum will persist throughout 2024.
Additionally, they have confirmed their sales guidance for the year, projecting revenues to be between $37 million and $40 million, which represents a year-over-year growth of 16% to 26%. This guidance is now seen as potentially conservative in light of the recent performance.
In the first quarter alone, Brainsway recognized the sale of 57 systems across the globe. The pricing of these systems has been firmer than expected, with an increased number of service components being included. The company is also exploring a shift towards a price per use model, which is expected to be beneficial for the business.
Lastly, Brainsway is actively pursuing new applications for its Deep TMS (Transcranial Magnetic Stimulation) technology. The company is making progress in evaluating the Deep TMS 360 system for use in treating conditions such as stroke and obsessive-compulsive disorder (OCD), potentially broadening its market and application scope.
InvestingPro Insights
Following the recent upgrade by Oppenheimer, Brainsway's (NASDAQ:BWAY) market dynamics offer a nuanced picture. With a market capitalization of $94.37 million and a negative P/E ratio of -22.33, the company's valuation reflects its current non-profitability status. This aligns with one of the InvestingPro Tips indicating that analysts do not expect Brainsway to be profitable this year. Nonetheless, the company's strong revenue growth, which was 16.96% for the last twelve months as of Q4 2023, and an even more impressive quarterly growth rate of 49.66% in Q1 2023, suggests that the company's sales momentum is robust.
Investors may also find reassurance in Brainsway's liquidity position, as the company holds more cash than debt, and its liquid assets exceed its short-term obligations. This financial stability is crucial for the company as it continues to invest in research and development for new applications of its Deep TMS technology.
For those considering an investment, Brainsway has experienced a strong return over the last year with a price total return of 289.08%, and despite a year-to-date price total return of -12.04%, the recent performance includes a significant price uptick over the last six months at 42.86%. For more detailed analysis and additional InvestingPro Tips, investors can explore the 7 tips available on InvestingPro's platform. To gain deeper insights and access these valuable tips, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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