Nephros (NASDAQ:NEPH) Announces Quarterly Earnings Results

Nephros (NASDAQ:NEPH) released its earnings results on Thursday. The company reported $0.05 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.02 by $0.03, FiscalAI reports. Nephros had a return on equity of 10.60% and a net margin of 8.38%. The business had revenue of $5.62 million during the quarter, compared to the consensus estimate of $5.49 million.

Here are the key takeaways from Nephros’ conference call:

• Revenue and profitability grew: Third-quarter revenue rose 18% year over year to $5.6 million, while nine-month revenue increased 20% to $16.9 million. Nine-month net income grew to $1.8 million from $1.1 million, and adjusted EBITDA rose to $2.0 million from $1.4 million.
• Recurring business and customer reach expanded: Core programmatic revenue grew 19% for the first nine months, and active customer sites reached a record 1,766. Management said repeat orders and new installations support future replacement-filter demand.
• Gross margins came under pressure: Third-quarter gross margin fell to 58% from 61%, with higher inventory, shipping, handling and tariff costs, as well as a greater share of lower-margin service revenue, contributing to the decline. Management said it is working on pricing, sourcing, freight and operational efficiency.
• Nephros is pursuing broader markets and services: Healthcare remained its core market, while commercial and industrial customers accounted for 17% of new sites in the quarter. Management is also investing in service and education to support adoption and identify new product opportunities, though it said education’s return is still being evaluated.

Nephros Trading Down 9.7%

Shares of NEPH stock traded down $0.30 during trading on Friday, reaching $2.79. 104,011 shares of the company’s stock traded hands, compared to its average volume of 59,226. The firm’s 50-day moving average is $3.82 and its 200 day moving average is $3.66. The company has a market capitalization of $30.33 million, a P/E ratio of 29.45 and a beta of 1.76. Nephros has a 1 year low of $2.66 and a 1 year high of $6.42.

Wall Street Analyst Weigh In

A number of brokerages have recently commented on NEPH. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Nephros in a research report on Friday, October 30th. Zacks Research upgraded Nephros to a “hold” rating in a research note on Monday, July 20th. Northland Securities started coverage on Nephros in a report on Friday, July 17th. They issued a “market perform” rating and a $4.00 price objective for the company. Finally, Benchmark restated a “speculative buy” rating on shares of Nephros in a research note on Tuesday, August 18th. One research analyst has rated the stock with a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and an average target price of $4.00.

About Nephros

Nephros, Inc is a medical device company that develops and sells filtration products designed to improve water quality and reduce the risk of waterborne contamination. Its technologies are based primarily on ultrafiltration membranes that remove bacteria, viruses, endotoxins, cysts and other impurities from water.

The company serves the healthcare market with filtration systems for hemodialysis and infection-control applications. Its products are designed for use in hospitals, dialysis centers and other healthcare facilities where purified water is important for patient care and clinical operations.

Nephros also offers commercial water-filtration products for applications such as foodservice, hospitality, commercial buildings and healthcare facilities.