Envoy Medical, Inc., a hearing health company, provides medical technologies for the hearing loss spectrum. Its products include hearing aids; Esteem middle ear implants; bone conduction devices; and Acclaim cochlear implants. Envoy Medical Corporation was formerly known as St. Croix Medical, Inc. and changed its name to Envoy Medical Corporation in December 2004. The company was founded in 1995 and is based in White Bear Lake, Minnesota.

Envoy Medical, Inc.

Healthcare

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 13ppts over six months and grown 17ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -6417.9% in the last 12 months, a decline from -5384.7% in FY23. 

Historically, COCH has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -9209.0%, down from -5014.7% in FY23. 

Envoy Medical, Inc. reported a return on equity (RoE) of 150.3% in the last 12 months, up from 54.7% in FY23. The market consensus projects an RoE of 491.9% in FY24, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to -216.6% in the last 12 months, an increase from -310.8% in FY23. The market analysts predict that RoA will be -113.5% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to -1029.2%, below the peers. The consensus estimate for FY24 for RoCE is -937.4%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 9.0 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

COCH has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, and poor cash flow generation. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, COCH is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, COCH is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. 

Envoy Medical, Inc.

$ 1.72

1

Envoy Medical, Inc.

$ 1.72

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 1.72

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