Myomo Inc (NYSEAMERICAN:MYO) shares are tumbling nearly 19% after the medical-robotics maker released its fourth-quarter earnings report that failed to live up to Wall Street’s expectations. Specifically, MYO posted revenues of $0.5 million, an increase of just $0.1 million, or 22% over the same period last year. The company’s gross margin was 63%, compared to 79% in previous year quarter. The change in gross margin was primarily due to revenue recognized in the 4Q16 relating to payments from Ottobock that did not have any costs associate with them. Net net, MYO’s net loss for the quarter amounted to $1.9 million, compared with a net loss of $1.21 million for the corresponding 2016 period.
Despite disappointing elements in yesterday’s results, H.C. Wainwright analyst Amit Dayal continues to back MYO with a ‘buy’ rating and price target of $12, which implies an upside of 191% from current levels. (To watch Dayal’s track record, click here)
Dayal commented, “The company is focused on expansion of its sales and marketing efforts. Toward this end, the company has expanded its sales team and is continuing to expand its centers of excellence (CoE) business model. The company now has 36 CoE locations across the country. In addition, the company is also increasing its accessibility to patients by conducting joint patient screening events with clinical and rehabilitation partners. […] Internationally, Ottobock is helping the company’s sales in Germany and Canada. During the quarter, the company obtained Medical Device License in Canada which enables MyoPro sales in that country. On the reimbursement front, the company indicated that it is experiencing an approximately 75% success rate in private payment approvals. Management also sounded optimistic about its application for the Healthcare Common Procedure Coding System (HCPCS) code, which, if approved, should further expand the pool of potential MyoPro eligible patients. We believe that investors will now be tracking the company’s transition from the controlled launch phase to scaling up operations.”