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Vapotherm Q3 Earnings: Time To Buy Struggling NYSE:VAPO Stock?

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Vapotherm, Inc. (NYSE:VAPO) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of -$0.54/share on revenue of $24.584 million. The consensus earnings per share (EPS) of -$0.54/share is based on a poll of 4 analysts and represents a growth in eps of 16.5% over the same quarter last year, when the company reported earnings of -$0.65/share.

The revenue forecast of $24.584 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 127.4%. Last year the company reported $10.809 million in revenue for the quarter.

Expected to report EPS of -$0.54/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $24.58 $10.81 127.4%
EPS -$0.54 -$0.65 16.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 7 tracked quarters, and missed expectations 1 quarter.

What are your expectations from Vapotherm, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.37 -$0.35 4.8% Beat
Q1, 2020 -$0.57 -$0.66 -15.3% Missed
Q4, 2019 -$0.70 -$0.60 14.7% Beat
Q3, 2019 -$0.75 -$0.65 13.3% Beat
Q2, 2019 -$0.78 -$0.76 1.9% Beat
Q1, 2019 -$0.78 -$0.76 2.3% Beat
Q4, 2018 -$1.41 -$1.39 1.2% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −38.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $52.94 $32.73 −38.2% Decline
May 5, 2020 $20.90 $30 43.5% Increase
March 4, 2020 $8.82 $10.15 15.1% Increase
November 5, 2019 $12.35 $8.17 −33.8% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.69, the model suggests that the company is likely an earnings manipulator. A value of −1.69 implies a 4.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Vapotherm, Inc. is currently trading at $29.19/share, down −3.4% for the day. The company is trading at approximately 53.4% of its 52-week high of $54.42/share. The company’s stock price is down −10.8% since the last earnings report and down −4.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.81 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:VAPO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −15.85 and a forward P/E multiple of −16.57.

Vapotherm, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.37. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $29.19
P/E Ratio −15.9x
P/E Ratio (Fwd) −16.6x
PEG Ratio −0.3
Total Debt / Total Capital 5.7%
Levered Free Cash Flow -$51.873 million
EV / EBITDA −16.1x

Finbox

Vapotherm, Inc. is a small-cap stock with a market capitalization of $772.5 million and a total enterprise value of $670.6 million. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Vapotherm, Inc., a medical technology company, focuses on the development and commercialization of proprietary Hi-VNI technology products used to treat patients of various ages suffering from respiratory distress worldwide. The company offers precision flow systems, such as Precision Flow Hi-VNI, Precision Flow Plus, Precision Flow Classic, and Precision Flow Heliox that use Hi-VNI technology to deliver heated, humidified, and oxygenated air at a high velocity to patients through a small-bore nasal interface. It also provides companion products, including Vapotherm Transfer Unit, which allows patients to be transferred between care areas within the hospital or ambulate while on therapy; Q50 compressor, which provides compressed air necessary to run the precision flow systems; aerosol aeroneb adaptor to facilitate delivery of ultrasonic aerosolized medication; tracheostomy adaptors; and ProSoft cannula to provide gentle contact with the skin. In addition, Vapotherm, Inc. offers aerosol disposable patient circuit that is designed to streamline the provision of intermittent and continuous aerosol nebulization by limiting condensate management; and disposable products comprising single-use disposables and nasal interfaces, as well as Oxygen Assist Modules, which helps clinicians maintain oxygen levels within a target range. The company sells its products to hospitals. Vapotherm, Inc. was founded in 1993 and is based in Exeter, New Hampshire.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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