Zynex Plans To Buy Back $10M In Stock; Shares Jump Over 10%

Shares of Zynex closed 10.1% higher on Monday after the medical device manufacturer announced its plans to repurchase $10 million worth of shares.

Zynex (ZYXI) said that the repurchase program will commence immediately and is set to expire on Sep. 8, or before the buyback limit of $10 million is reached.

The company’s CEO Thomas Sandgaard said, “this buyback program authorization reflects the board’s confidence in both our short-term prospects and our long term growth strategy.” He added that, “the buyback program represents an attractive opportunity to deploy capital in a way that will benefit stockholders.”

Last month, Zynex reported lower-than-expected 4Q results. The company reported 4Q earnings of $0.05 per share, which missed consensus estimates by a cent and fell 44.4% year-over-year. Revenues of $25.6 million grew 81% year-over-year but missed analysts’ expectations of $25.8 million. (See Zynex stock analysis on TipRanks)

Following the 4Q miss, B.Riley Financial analyst Marc Wiesenberger downgraded the stock to Hold from Buy and lowered the price target to $19 (17% upside potential) from $23. In a note to investors, the analyst said that the company provided a “wider than normal” FY21 guidance range. The analyst further lowered his FY21 estimates, given “deteriorating profitability and increased uncertainty.”

Overall, the Street has a Moderate Buy consensus rating based on 1 Buy and 3 Holds. The average analyst price target of $21.63 implies upside potential of over 33% to current levels. Shares have gained about 14.6% in one year.

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