Myomo (NYSE:MYO) shares took a hit today on fourth-quarter results that came up short of the consensus forecast.
Shares of MYO fell 10% to $3.16 apiece in mid-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — ticked up 0.5%.
The Boston-based wearable exoskeleton maker posted losses of $2.5 million in the quarter. That amounts to 7¢ per share on sales of $4.76 million for the three months ended Dec. 31, 2023. Myomo’s bottom line dipped 13.5% deeper into the red on sales growth of 17.7%.
Losses per share fell 1¢ shy of Wall Street expectations, while sales came up just short of the projected $4.79 million.
“Fourth quarter and full year 2023 revenues were in line with our expectations as we continued to post solid gains in all key performance metrics,” said Paul R. Gudonis, Myomo chair and CEO. “Our pace in converting pipeline to backlog accelerated during the fourth quarter as 44 Medicare Part B patients were included in the year-end count, resulting in a record backlog of 230 patients as the first quarter began. We believe 2024 can be a transformational year for the company and for Medicare Part B beneficiaries who now have access to the MyoPro.”
Strong outlook for Myomo
Despite marginal financial shortcomings in the quarter, the outlook for Myomo remains positive. The company expects to benefit from a new proposed Medicare rule. It would classify the company’s technology as a brace, enabling payments on a lump sum basis.
Final CMS fees go into effect on April 1, while regional billing contractors continue to determine payment amounts for beneficiaries.
With this in mind, Gudonis said the company projects first-quarter revenue to range between $4.1 million and $4.3 million. For the full year, he projects between $28 million and $30 million.
That full-year projection hinges on increases in capacity, as the company plans, plus no supply chain disruptions. To start the year, Myomo raised $6 million and pledged to increase its clinical, reimbursement and manufacturing capacity. The company expects to hire approximately 50 people over the next six months. Gudonis reiterated that plan, saying the company could have 50-60 new employees by the end of the second quarter.
“We believe we have the opportunity to generate $28 million to $30 million in revenue in 2024, with second half revenues much higher than the first half,” Gudonis said. “Assuming this rate of revenue growth, we believe reaching operating cash flow breakeven on a quarterly basis by the fourth quarter of 2024 is achievable.”