What happened
Shares of Zynex (ZYXI 2.47%) are up more than 9% early Wednesday afternoon after the medical equipment company announced it planned to do a stock repurchase. That said, the stock is down more than 32% so far this year.
So what
Zynex makes electrotherapy medical devices for pain management and rehabilitation and a blood volume monitor for use in healthcare settings. The company announced on Wednesday morning that its board of directors had approved a $10 million stock buyback program that would begin Wednesday and run until next June. The buyback should be accretive to the stock's earnings per share (EPS), and will be financed with the company's cash reserves, so investors were happy.
The move is meant to show confidence in the company, especially with its shares down to start the year. Last year, the company did $30 million in stock buybacks.
Now what
The latest move may be warranted, as the company's shares have fallen despite strong numbers. The drop was likely mainly to the company agreeing in May to pursue a stock sale offering of $50 million in convertible senior notes, due in 2026, for financing.
In the first quarter, Zynex reported revenue of $42.2 million, up 36% year over year, and net income listed as $1.6 million, up 17% over the same period last year. The company's guidance points to annual revenue between $180 million and $200 million, compared to $158.2 million in 2022, and yearly EPS of between $0.40 and $0.50, compared to EPS of $0.44 last year. The EPS would likely be higher, but the company said it is expecting higher labor costs and increased expenses for anticipated product launches.
