Monday, June 27, 2022

Bold Move on Penny Stock Zynex Inc. (OTCMKTS:ZYXI)

Zynex Inc. (OTCMKTS:ZYXI) is a penny stock that has been seriously on the move lately, and it seems like this one has been basically under the radar for most OTC traders. A small microcap broker came out with an analyst action on ZYXI this week – which is exceedingly rare for stocks on the OTC, and we don’t really know anything about this boutique shop. It’s not like Morgan Stanley came out with a research piece, so it has to be taken with gigantic grain of salt. That said, the piece has perhaps shined a spotlight on this hidden play.
ZYXI shares have been cooking red hot lately. We’ve seen this thing move from a quarter per share back in May to over $1.50 per share this week, on an intraday basis. Why has this taken off to such a remarkable degree? Part of it is probably the fact of a 13M share float. But that’s hardly the whole story. Thomas Sandgaard, CEO commented on recent financial results: “I am very excited to report strong net income of $1.5 million in the second quarter which continues our trend of bottom line improvement. Our revenue grew to $5.0 million, an increase of 47% compared to the first quarter and 53% above the second quarter of last year. Our gross profit margin continued to improve to 80% versus 75% in Q1-2017 and Q2-2016.”
Zynex Inc. (OTCMKTS:ZYXI) frames itself as a company that was founded back in 1996.
The company is a leading provider of electrotherapy medical devices for pain management and rehabilitation. Zynex is committed to providing the highest-quality patient life through non-invasive rehabilitation products; including NexWave, a electrotherapy device, and the NeuroMove used for recovery of stroke and spinal cord injury patients.
ZYXI is also developing a non-invasive blood volume monitor for use in hospitals and surgery centers.
According to company materials, “Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company’s proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. . Zynex is also developing a new blood volume monitor for use in hospitals and surgery centers.”
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As noted above, ZYXI shares have been on fire, ripping over 500% higher in the last several months, and picking up some boutique shop support recently as well. That may all stem from the company’s recent earnings data. According to its release, the Company reported net revenue of $5.0 million, a 53% increase over Q2-2016 and a 47% increase compared to Q1-2017. For the six months ended June 30, 2017, total revenue was $8.5 million vs. $6.8 million for the six months ended June 30, 2016.
“Cost of revenue increased to $1.0 million from $0.9, million which generated increased gross margins of 80% compared to 71% last year. Gross margins for the six months ended June 30, 2017 increased to 77% from 71% in 2016. Selling, General and Administrative (“SG&A”) expenses were $2.1 million in the second quarter of 2017, compared to $2.5 million last year. The Company’s SG&A expenses decreased 16% compared to the same period last year, continuing a trend of decreasing operating expenses. Net income grew 769% to $1.5 million in the second quarter of 2017, compared to a loss of $0.2 million last year. For the six months ended June 30, 2017, net income grew 378% to $1.9 million from a loss of $0.7 million in 2016. Adjusted EBITDA grew 7463% to $2.0 million in the second quarter of 2017 compared to a loss of $27,000 last year. For the six months ended June 30, 2017, Adjusted EBITDA grew 1959% to $2.6 million from a loss of $0.1 million in 2016. The Company generated $1.9 million of cash from operations during the first half of 2017, which allowed it to pay off its credit facility which had been in default since 2014.”
The chart shows 73% tacked on to share pricing for the name in the past month. Market participants may want to pay attention to this stock. ZYXI has a track record that includes a number of dramatic bounces. Furthermore, the listing has seen an influx in interest of late, with the stock’s recent average trading volume running greater than 220% over what the stock has registered over the longer term.
This is particularly important with the stock trading on a float that is relatively small at just 13.5M shares. Traders should not overlook this combination, as with such a tight trading float, this kind of ramping interest can force a supply-shock squeeze.
Now commanding a market cap of $41.7M, ZYXI has a chunk ($140K) of cash on the books, which stands against about $638K in total current liabilities. ZYXI is pulling in trailing 12-month revenues of $15M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 53.4%. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $ZYXI stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: We hold no position in $ZYXI, either long or short, and we have not been compensated for this article.

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