iRadimed Corp ($IRMD) recently announced increase in IV pump bookings during the month of March. These pumps are one of the two primary revenue generators for the firm, the other one being an MRI scanner. IV pumps are covered under 510 (k) FDA Premarket license, giving them an almost virtual monopoly command over the market.

However, the company has another star performer in waiting as its new Patient Monitor is also in line to receive 510(K) grade. According to the company management, its new  MRI compatible patient vital signs monitoring system has generated quite a buzz. The product is yet to be launched in the US as the company is in the process of communicating with the FDA, which has asked the company for additional human factors and signal quality testing. Pursuant to these developments, the company has decided to push the likely launch date for the product to the fourth quarter, from the third quarter.

3860

Source: iRadimed

iRadimed Corp has strong financial position, which is clearly evident from its upcoming share repurchase program. While this was mentioned during the quarterly earnings update, the company has yet to make any concrete announcement. For the second quarter of the year, the company expects its revenue to be in the range of $5.4 million to $5.5 million while its first quarter revenue stood at $5.2 million. The company’s equity valuation in the market is likely to be positively affected by such increase in the revenue.

Overall, the stock offers a good entry point at the current price level. The investors with medium to long term have several catalysts coming up in near future, which may help in obtaining good yield over the investment.

Risks

One of the biggest risk faced by the company is with regard to the delay in launch of its MRI compatible patient monitor. The delay in launch from the third quarter to fourth quarter may have impact on the cash inflow for the firm. However, the impact is likely to be minimal as the company has strong liquidity position. It also revised its full year revenue guidance during the announcement of the first quarter results. The current stock price, thus, is believed to have already factored in the information.

Catalysts

Main upcoming catalyst is the upcoming launch of its new product in the fourth quarter. Another catalyst before the launch will be the announcement of second quarter results, which are expected to perform better than the first quarter.

Management

Roger Susi

Chief Executive Officer, President, Chairman of the Board

Roger Susi is the founder of the Company and has served as its Chief Executive Officer and President and a director from inception. He has over 25 years of management experience in the medical device industry, including as a founder, Chairman and Chief Executive Officer of Invivo Research Inc., a medical device company and the predecessor to Invivo Corporation, which established MRI–safe patient monitoring

Chris Scott

Chief Financial Officer and Secretary

Chris Scott has served as the Chief Financial Officer since December 2013. Mr. Scott has extensive experience in finance and accounting. Mr. Scott held a management position at Darden Restaurants, Inc. from 2010 to 2013, where he provided accounting and reporting oversight.

Investment strategy

Entry - Current price point

Profit Point – at the time of launch of MRI compatible patient monitor

Hold duration – Medium Term

Price Target (consensus) - $10

Exit - $10

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