Positive Developments at Zynex

Brian Marckx, CFA

Positive Developments at Zynex

Zynex Inc. (ZYXI - Analyst Report) has announced several positive developments over the last week which should work towards addressing certain issues that the company has faced.

Last Thursday Zynex announced that they signed a letter of intent to acquire NeuroDyne Medical Corp, a privately-held Cambridge, MA based manufacturer of medical devices for electromyography (sEMD) and autonomic nervous system monitoring.  NeuroDyne's suite of products appear to complementary to Zynex's and are used for a variety of purposes including spinal imaging (via sEMD) and neuromuscular rehabilitation.    NeuroDyne's website notes their world-wide customer base is 3,000 strong and includes notable names such as the U.S. Air Force, Mayo Clinic and J&J, among several others.  While terms of the proposed deal or NeuroDyne's financial history were not disclosed in the press release, we view this as a potentially positive step towards Zynex's quest to further grow revenue and profitability.  

Zynex followed with news this morning that they have appointed a V.P. of Reimbursement and Billing.  Keith White, which Zynex notes has over 20 years of healthcare and senior management experience, including a long tenure at Empi, Inc, was hired to fill the position.  Mr. White's experience at Empi, a direct competitor of Zynex's and the largest manufacturer/supplier of TENS devices, included Director of Sales Operations and Patient Care Services and Billing.  We believe Mr. White could be a meaningful addition to Zynex's staff as the nature of the industry and reimbursement environment means the billing function is far from straightforward.   

While lingering issues remain, we believe Zynex is making meaningful headway in addressing some of these and the last week offers further support towards this.

We cover Zynex with an Outperform rating and $1.40 per share price target.  

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