Tenon Medical, Inc., a medical device company, develops surgical implant systems to optimize sacroiliac joint fixation/fusion surgery and corresponding outcomes. It sells The CATAMARAN SIJ Fusion System that includes instruments and implants designed to prepare and fixate the SI-Joint for fusion in the United States and Puerto Rico. The company was founded in 2012 and is based in Los Gatos, California.

Tenon 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. 

TNON reported revenue of USD 3mn in the last 12 months, up 0% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 37% from FY24 to USD -15.34. Market expects EPS to reach USD -21.53 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 34ppts and its growth accelerated by 8ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -404.4% in the last 12 months, up from -516.9% in FY23. 

Historically, TNON has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -417.6%, a growth from -530.2% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to -190.4%, below the peers. The consensus estimate for FY24 for RoCE is -134.4%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to -138.9% in the last 12 months, an increase from -178.1% in FY23. The market analysts predict that RoA will be -67.7% in FY24, again weaker than its peers. 

Tenon Medical, Inc. reported a return on equity (RoE) of -270.1% in the last 12 months, up from -441.7% in FY23. The market consensus projects an RoE of -552.2% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -73.6 in the past several years. This ratio implies a fragile 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.

TNON has poor trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is very unstable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 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 bleak profitability, negligible return on capital, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, TNON 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, TNON 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 'cheaper' than its peers. In particular, the stock is 'cheap' on EV/EBITDA. 

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Tenon Medical, Inc.

$ 1.01

3

Tenon Medical, Inc.

$ 1.01

3

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