Piper Sandler launched coverage of Zynex (NASDAQ:ZYXI) with an “overweight” rating and $30 price target. The stock closed at $21.42 on July 17.
Zynex sells the only three-in-one, at home, chronic pain management product on the market that helps patients either on a short term or chronic basis.
One of the modalities in its pain management device, known as NexWave, is called interferential current, which provides stimulation at very high frequency levels and elicits an anatomical response to reduce symptoms for hours rather much shorter periods with other neuromodulation technologies.
Mr. O’Brien said Zynex is aggressively expanding its sales force to capture a void created by the exit of two large providers in the category a few years ago. “Although there is risk to the sales force expansion effort, we anticipate Zynex will be able to manage the process and deliver outstanding revenue growth in the coming years,” he added.
Citing a strong profitability profile, with operating margins around 20% and “likely going much higher,” and an option on a recently approved blood volume monitoring system, “there is a ton to like about the story,” Mr. O’Brien said.
In addition, the company trades at a reasonable enterprise value-to-sales multiple, and “we encourage investors to start positions in the name,” he added.
