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Can HVT 2.0 Lead to Gains? By TipRanks


© Reuters. Vapotherm Stock – Can HVT 2.0 Bring You Gains?

Vapotherm stock (NYSE:) is neutral as it has a high-potential pipeline and attractive stock price. The company faces a lot risk due to its falling revenues and growing losses.

Vapotherm, a public corporation, manufactures ventilator-support technology.

This company was the pioneer of a non-invasive and humidified high velocity therapy nasal cannula system. It’s used to treat patients with severe respiratory distress who are unable or unwilling to wear masks.


Vapotherm recently announced it has received 510(k) clearance from the FDA for its innovative next-generation system, the HVT 2.0. The HVT 2.0 system provides high-flow therapy with an integrated air source.

Technology is due to become available during the fourth quarter in 2021. The technology seems to be very promising since approximately 50% of US hospitals do not have wall air. If HVT 2.0 is used in conjunction with oxygen sources, it will be able to provide respiratory support for patients at both home and hospitals.

Recent Results

Vapotherm reported revenue of $20.6 million for the second quarter of 2021, which shows a decrease of 41% year-over-year. For the second quarter in 2021, adjusted EBITDA lost $12.3million versus $4.3million for the previous quarter. Due to lower COVID-related equipment demand, the loss led to a decrease in revenue over the year.

It also announced that the company would increase its disposable equipment manufacturing capacity in Mexico by adding assembly lines. This will result in an additional 75% in production. This will diversify Vapotherm’s manufacturing base, and is expected to improve the company’s gross margin in the coming months.

Vapotherm now expects to generate revenue between $85 and $90 millions for Fiscal Year 2021. That’s higher than its previous revenue estimate of $82 million to $88 million.

Valuation Metrics

Vapotherm stock does not look too expensive when considering the EV/Revenue ratio of 7.1x. The company isn’t making a profit and is losing cash. Any valuation is therefore highly speculation.

In 2021 and 20,22 revenues will decline, but losses will increase. Therefore, the stock’s current undervalued status is not clear.

Wall Street’s Take

From Wall Street analysts, Vapotherm earns a Strong Buy analyst consensus, based on three unanimous Buy ratings in the past three months. Furthermore, Vapotherm’s upside potential of 47% is represented by the $40.67 average VAPO price target.

Summary and Conclusions

Vapotherm looks like an interesting speculative opportunity at the moment. Vapotherm has good upside potential. The stock, however, is extremely risky and burning cash quickly at an alarming rate. It is also not yet profitable.

Its revenues will likely decline and its losses will increase over the next year.

Disclosure: Samuel Smith was not a shareholder in any company mentioned in the article at the publication date.

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