One-glance verdict
Undervalued
$10.45 our estimate vs market $4.73
Wall Street consensus: $7.40 (-29.2% lower than our fair-value estimate)
55% below our estimate, below the bear case
Fundamentals snapshot
MiMedx Group, Inc.
MDXG · NCM · Healthcare · Biotechnology
Current price
$4.73
52-week range
$3.03 - $7.97
Market cap
$690.27M
Balance sheet
Healthy
63.51x Strong cushion
Net cash $118.63M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Returns 2.9% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 3/10 years.
- Risk Stock trades 347.8% above its 5-year average P/E.
- Risk Operating margin compressed from -5.5% to -28.7% over 3 years.
What this company does
MiMedx Group, Inc.
MiMedx Group makes advanced medical products from donated human placental tissue, which are used like a high-tech bandage to treat serious wounds, burns, and surgical injuries. The company earns its money by selling these specialized tissue products directly to hospitals and doctors. This matters because their patented process is designed to create effective treatments for difficult-to-heal wounds, addressing a constant need in the healthcare industry.
How the company got here
MiMedx was founded in 2008 to create skin grafts and other medical products from donated birth tissues like the placenta. The company grew quickly but faced a major turning point starting in 2018 when it went through a difficult period involving allegations of accounting fraud. This led to investigations, the departure of former top executives, and a restatement of its financial results. Since 2019, new leadership has worked to resolve these past issues, relisting the company's stock on the NASDAQ exchange in 2020 and refocusing the business on its core products.
What it actually does
MiMedx creates medical products that help the human body heal. It takes donated human placentas and umbilical cords and, using a special process, turns them into coverings, called allografts, that can be placed on wounds or used in surgery. Think of them as sophisticated, biological bandages that help treat serious burns, chronic wounds like diabetic foot ulcers, and injuries from surgery. These products contain natural biological materials that support the body's own healing process.
Wound Care
This part of the business focuses on products for hard-to-heal wounds, such as foot ulcers that can occur with diabetes. Hospitals and outpatient clinics buy these placental tissue products, like the company's flagship EPIFIX, to use as a protective barrier that helps these chronic wounds close. While this has been a very large part of the company's business, recent changes in how Medicare (a major government health insurance program) pays for these products have created challenges. This segment's sales have recently declined, making it a smaller portion of the company's total revenue than its surgical business.
Surgical
This segment provides tissue products used by surgeons in various operations, such as orthopedic, plastic, and vascular surgeries. Doctors use products like AMNIOFIX inside the body to protect tissues and support healing during the surgical recovery process. This business line has been growing consistently and now represents the majority of the company's sales. The company is increasingly focused on expanding this area, which has become its largest and most predictable source of revenue (money the company earns from sales).
What management is betting on now
Management's current strategy is to focus heavily on growing its Wound & Surgical business, which it sees as its core strength. A key priority is to expand the use of its products in surgical settings, which has been a reliable growth area. The company is also navigating challenges in the wound care market due to changes in government reimbursement (how hospitals and doctors get paid for using the products). To accelerate its focus on surgery, MiMedx recently announced its intention to acquire another medical technology company, Sanara MedTech, which will significantly increase the surgical side of the business.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$64.36M
Net income
$-14.84M
Diluted EPS
-0.10
Operating cash flow
$-10.02M
Free cash flow
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Revenue
$58.99M
Net income
$-10.86M
Diluted EPS
-0.07
Operating cash flow
$1.88M
Free cash flow
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Sources
Revenue
$118.09M
Net income
$15.19M
Diluted EPS
0.10
Operating cash flow
$24.96M
Free cash flow
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Revenue
$113.72M
Net income
$16.75M
Diluted EPS
0.11
Operating cash flow
$29.33M
Free cash flow
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Revenue
$98.61M
Net income
$9.62M
Diluted EPS
0.06
Operating cash flow
$14.42M
Free cash flow
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Revenue
$88.20M
Net income
$7.02M
Diluted EPS
0.05
Operating cash flow
$5.30M
Free cash flow
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Revenue
$92.91M
Net income
$7.44M
Diluted EPS
0.05
Operating cash flow
$18.78M
Free cash flow
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Revenue
$84.06M
Net income
$8.10M
Diluted EPS
0.05
Operating cash flow
$19.62M
Free cash flow
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Is it cheap or expensive?
Fair value $10.45 vs current price $4.73
Wall Street consensus is the average analyst price target: $7.40 (-29.2% lower than our fair-value estimate).
Our most-likely fair value is $10.45 a share — about 121.0% above today's price of $4.73, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $118.6M - more cash than debt. Interest coverage 63.5x.
Net debt
$-118.63M
Interest coverage
63.51x
MiMedx Group, Inc.'s profit covers its interest bill about 63.5 times over. which is stronger than every peer shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
MDXG
BASELINE
MiMedx Group, Inc.
Total debt $17.21M Interest coverage 63.51x This is the baseline the peer rows are being compared against.
Total debt $66.95M Interest coverage 36.18x -43% vs MDXG Carries about 1.8x less debt cushion than MDXG.
Total debt $2.05B Interest coverage 0.21x -100% vs MDXG Carries about 304.4x less debt cushion than MDXG.
Total debt $25.25M Interest coverage -6.34x -100% vs MDXG This peer has almost no interest-payment cushion compared with MDXG.
Total debt $93.13M Interest coverage 17.53x -72% vs MDXG Carries about 3.6x less debt cushion than MDXG.
Total debt $20.07M Interest coverage -1.02x -100% vs MDXG This peer has almost no interest-payment cushion compared with MDXG.
What you should know
The case for and against MDXG
2 Rewards
3 Risks
Rewards
-
Returns 2.9% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Stock trades 347.8% above its 5-year average P/E.
-
Operating margin compressed from -5.5% to -28.7% over 3 years.
-
Insider ownership is only 2.1% (peer median: 6.4%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
118.25x
Forward P/E
23.65x
P/B
3.19x
P/S
1.94x
EV/EBITDA
27.97x
PEG ratio
2.88x
Profitability
How much profit each dollar creates
Gross margin
78.8%
Operating margin
-28.7%
Net margin
1.8%
ROE
2.9%
ROA
1.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
5.33x
Quick ratio
4.60x
Total debt
$17.21M
Total cash
$135.84M
Growth
How the business has been compounding
Revenue TTM
$355.17M
Revenue 5Y CAGR
14.7%
EPS TTM
0.04
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$46.15M
Free CF TTM
$72.97M
FCF margin
20.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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