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FONAR Stock Dips Post FY25 Earnings on Lower Profit and Higher Costs
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Shares of FONAR Corporation (FONR - Free Report) have lost 1.5% since the company reported its earnings for the quarter ended June 30, 2025. This compares with the S&P 500 Index’s 0.5% gain over the same period. Over the past month, FONAR stock gained 2.5%, underperforming the S&P 500’s 3.5% rise.
FONR’s Earnings Snapshot
FONAR’s fiscal 2025 performance was mixed, with revenue rising modestly but profitability under pressure. Net revenues edged up 1.4% to $104.4 million from $102.9 million, driven primarily by diagnostic imaging management services and product-related fees. However, total costs and expenses increased 7.4% to $92.8 million from $86.3 million, compressing margins. Income from operations dropped 29.9% to $11.6 million from $16.5 million a year earlier. Net income fell 24.3% to $10.7 million from $14.1 million, and diluted earnings per share declined 19.6% to $1.23 from $1.53.
Segmentally, revenues from the management of diagnostic imaging centers increased 1% to $95.4 million in fiscal 2025 from $94.6 million in fiscal 2024, while product sales and service/repair fees climbed to $9 million in fiscal 2025 from $8.3 million in fiscal 2024. Despite these gains, rising costs and expenses weighed heavily on margins.
FONAR’s Other Key Business Metrics
Cash and cash equivalents remained stable at $56.3 million at the end of fiscal 2025, consistent with fiscal 2024. Working capital was $127.5 million as of June 30, 2025, compared with $122.5 million as of June 30, 2024, reflecting healthy liquidity. Stockholders’ equity rose to $160.1 million as of June 30, 2025, from $156.8 million a year ago, and book value per share increased to $25.26 as of June 30, 2025, from $24.20 as of June 30, 2024. Operating cash flow came in at $11.3 million in fiscal 2025, down from $14.1 million in the prior year.
FONAR’s wholly owned subsidiary, Health Management Company of America (“HMCA”), remained its primary income driver. Scan volume at HMCA-managed centers reached a record 216,317 in fiscal 2025, representing a 3.3% increase from 209,346 in fiscal 2024. New York operations delivered 4.4% growth in scans, offsetting the muted growth of 1.6% in Florida. Management highlighted tort reform in Florida as a headwind, as legal changes reduced MRI demand tied to personal injury cases and lowered recoveries for medical expenses.
Fonar Corporation Price, Consensus and EPS Surprise
CEO Timothy Damadian highlighted continued expansion of HMCA’s MRI operations, noting the addition of high-field MRIs to existing Stand-Up MRI centers in Naples, FL, and Melville, NY during fiscal 2025, with another installation underway in Nassau County, Long Island. Plans are in place to open an additional HMCA-managed center in Nassau County during fiscal 2026. He emphasized the complementary value of offering both high-field and Stand-Up MRI options, which broaden clinical capabilities for referring physicians.
Damadian acknowledged margin pressures, citing a $2.3 million reserve tied to risk exposure from a New York-based motor vehicle insurer ordered to increase reserves due to a reported $650 million shortfall. This contributed to a $2.9 million rise in selling, general, and administrative expenses, up 10.7% year over year.
Factors Influencing FONAR’s Results
The slight revenue growth was overshadowed by expense inflation and reserve-related charges. While demand for diagnostic imaging remains resilient, external factors, such as regulatory changes in Florida, have weighed on utilization and reimbursements. Higher administrative costs, particularly insurance-related reserves, further compressed profitability despite steady scan volume gains.
FONR’s Guidance
FONAR did not provide formal financial guidance for fiscal 2026. However, management indicated plans to expand its MRI network, including the installation of another high-field MRI in Nassau County, NY, in the first half of fiscal 2026 and the opening of an additional HMCA-managed center later in the year. These moves suggest a focus on strategic network growth to support future revenue streams.
FONAR’s Other Developments
FONAR’s board-approved stock repurchase plan, launched in September 2022 with authorization for up to $9 million, remained active through June 2025. To date, the company repurchased 373,942 shares for approximately $6.1 million. However, repurchases have been suspended due to the potential “take private” transaction announced in July 2025, under which the company may acquire all publicly held shares.
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FONAR Stock Dips Post FY25 Earnings on Lower Profit and Higher Costs
Shares of FONAR Corporation (FONR - Free Report) have lost 1.5% since the company reported its earnings for the quarter ended June 30, 2025. This compares with the S&P 500 Index’s 0.5% gain over the same period. Over the past month, FONAR stock gained 2.5%, underperforming the S&P 500’s 3.5% rise.
FONR’s Earnings Snapshot
FONAR’s fiscal 2025 performance was mixed, with revenue rising modestly but profitability under pressure. Net revenues edged up 1.4% to $104.4 million from $102.9 million, driven primarily by diagnostic imaging management services and product-related fees. However, total costs and expenses increased 7.4% to $92.8 million from $86.3 million, compressing margins. Income from operations dropped 29.9% to $11.6 million from $16.5 million a year earlier. Net income fell 24.3% to $10.7 million from $14.1 million, and diluted earnings per share declined 19.6% to $1.23 from $1.53.
Segmentally, revenues from the management of diagnostic imaging centers increased 1% to $95.4 million in fiscal 2025 from $94.6 million in fiscal 2024, while product sales and service/repair fees climbed to $9 million in fiscal 2025 from $8.3 million in fiscal 2024. Despite these gains, rising costs and expenses weighed heavily on margins.
FONAR’s Other Key Business Metrics
Cash and cash equivalents remained stable at $56.3 million at the end of fiscal 2025, consistent with fiscal 2024. Working capital was $127.5 million as of June 30, 2025, compared with $122.5 million as of June 30, 2024, reflecting healthy liquidity. Stockholders’ equity rose to $160.1 million as of June 30, 2025, from $156.8 million a year ago, and book value per share increased to $25.26 as of June 30, 2025, from $24.20 as of June 30, 2024. Operating cash flow came in at $11.3 million in fiscal 2025, down from $14.1 million in the prior year.
FONAR’s wholly owned subsidiary, Health Management Company of America (“HMCA”), remained its primary income driver. Scan volume at HMCA-managed centers reached a record 216,317 in fiscal 2025, representing a 3.3% increase from 209,346 in fiscal 2024. New York operations delivered 4.4% growth in scans, offsetting the muted growth of 1.6% in Florida. Management highlighted tort reform in Florida as a headwind, as legal changes reduced MRI demand tied to personal injury cases and lowered recoveries for medical expenses.
Fonar Corporation Price, Consensus and EPS Surprise
Fonar Corporation price-consensus-eps-surprise-chart | Fonar Corporation Quote
FONR’s Management Commentary
CEO Timothy Damadian highlighted continued expansion of HMCA’s MRI operations, noting the addition of high-field MRIs to existing Stand-Up MRI centers in Naples, FL, and Melville, NY during fiscal 2025, with another installation underway in Nassau County, Long Island. Plans are in place to open an additional HMCA-managed center in Nassau County during fiscal 2026. He emphasized the complementary value of offering both high-field and Stand-Up MRI options, which broaden clinical capabilities for referring physicians.
Damadian acknowledged margin pressures, citing a $2.3 million reserve tied to risk exposure from a New York-based motor vehicle insurer ordered to increase reserves due to a reported $650 million shortfall. This contributed to a $2.9 million rise in selling, general, and administrative expenses, up 10.7% year over year.
Factors Influencing FONAR’s Results
The slight revenue growth was overshadowed by expense inflation and reserve-related charges. While demand for diagnostic imaging remains resilient, external factors, such as regulatory changes in Florida, have weighed on utilization and reimbursements. Higher administrative costs, particularly insurance-related reserves, further compressed profitability despite steady scan volume gains.
FONR’s Guidance
FONAR did not provide formal financial guidance for fiscal 2026. However, management indicated plans to expand its MRI network, including the installation of another high-field MRI in Nassau County, NY, in the first half of fiscal 2026 and the opening of an additional HMCA-managed center later in the year. These moves suggest a focus on strategic network growth to support future revenue streams.
FONAR’s Other Developments
FONAR’s board-approved stock repurchase plan, launched in September 2022 with authorization for up to $9 million, remained active through June 2025. To date, the company repurchased 373,942 shares for approximately $6.1 million. However, repurchases have been suspended due to the potential “take private” transaction announced in July 2025, under which the company may acquire all publicly held shares.