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Why Nano-X Imaging Stock Was Up an Impressive 66% in January

By Jon Quast - Updated Feb 3, 2021 at 3:33PM

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And why February may not be shaping up quite as well.

What happened

Shares of Nano-X Imaging (NNOX 1.68%), commonly referred to as simply Nanox, were up 66% in January, according to data provided by S&P Global Market Intelligence. The company continues to attract enthusiastic fans celebrating its potentially game-changing medical-imaging solutions. However, it's possible a new setback might keep the stock from going up in February as much as it went up this past month.

So what

I believe it's fair to say Nanox stock is an extremely speculative investment right now. That's because its medical-imaging device hasn't been approved by regulators yet. Therefore, the company doesn't have any revenue right now. Because of the speculative nature of Nanox stock, it's been attacked in some reports by short-sellers

A person holds a tablet device displaying holographic projections of stock charts and rising arrows.

Image source: Getty Images.

Stocks under attack from shorts were in high demand in January, fueled by the epic short squeeze of GameStop stock. This likely contributed to the gains for Nanox stock.

That said, there were a couple of reasons for increased optimism for Nanox's long-term prospects. For starters, the company hired three executives in January -- a chief technology officer, a chief operating officer, and a chief marketing officer -- suggesting the company's leadership expects growth to take off soon.

Furthermore, Nanox announced a partnership with USARAD Holdings. The plan is to run Nanox's digital images through artificial intelligence software for advanced radiology diagnostics. So much could be said on this point, but suffice it to say this shows Nanox's products can be leveraged for applications beyond their primary purpose, which is extremely promising.

NNOX Chart

Since going public, Nanox stock has crushed the market average. NNOX data by YCharts

Now what

As good as this all sounds, there's still only one thing that really matters right now for Nanox shareholders: The company needs FDA approval. And unfortunately, it just had a setback. On Jan. 30, the FDA, rather than granting approval, asked Nanox for more information. This doesn't mean the project is doomed; it's simply part of the process. But it is a reminder just how tricky the FDA approval process can be and that nothing is guaranteed.

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