A revisit to Myomo Inc. (Ticker: MYO)

We have briefly talked about this new IPO before. It is a medical robotic company.  It has released Q4 earnings and Full year financial data of 2017 three days ago. Total revenue for the Q4 of 2017 increased 22% in compared with Q4 of 2016. For the full year 2017 total revenue increased 41%. Gross margin decreased to 68% from 74% year over year. We believe it is due to its expansion and increase of revenue cost respectively. It did a secondary offering in the end of November to raise capital for company’s expansion stage. R&D expenses increased 56% year over year. Q4 EPS is (0.25) which is a huge improvement compared to Q4 of 2016 EPS (1.25). Cash on hand at December 31,2017 was $12,959,000.

There are a few other things we like about this company:

  • No debt
  • Europe and Canada Markets approvals
  • Only of its kind in the market
  • Awaiting medicare paycode and Asia market approvals

Here are things that you should consider before making your investment: this company has move from controlled launch phase to commercial scale up which means increased demand of capital is expected in the near future. Because all the expansion and marketing are going to require additional amount of funds. We expect that there is going to be some sort of offering in the future. They do have warrants that they can exercise for additional funds. As a result, there is a certain level of dilution is expected. It may sounds bad to current shareholders. However, this is a normal activity to growing company such as MYO. We are bullish on MYO in the long term. For short term investors or day traders, you can expect the similar share price pattern in the upcoming a couple of quarters, which the SP would likely to goes up before next earnings and it would experience certain level of sell off post earnings as well. We could see a slight drop of current price in the near future.

P.S. we have adjusted our position post Q4 ER. We are a long in MYO.

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