Investment Thesis
DarioHealth is a cash-burning medical device company with deteriorating fundamentals: declining revenue (-17.3% YoY), deeply unprofitable operations (-130.9% operating margin), and negative free cash flow (-$6.1M). While the company maintains strong liquidity (3.07x current ratio) and reasonable gross margins (57.3%), it is destroying shareholder value with negative ROE/ROA and cannot sustain operations without further equity raises or strategic action.
Strengths
- Strong liquidity position with 3.07x current ratio and $15M cash reserves
- Reasonable gross margins of 57.3% indicating underlying product merit
- Conservative debt levels with 0.50x debt/equity ratio limiting financial risk
Risks
- Accelerating revenue decline of -17.3% YoY indicating loss of market share or demand
- Negative operating cash flow of -$6M annually with unsustainable cash burn rate
- Catastrophic operating margin of -130.9% showing inability to control costs relative to revenue scale
- Negative interest coverage ratio (-3.8x) creating debt service sustainability concerns
- Negative ROE/ROA demonstrating destruction of shareholder capital
Key Metrics to Watch
- Revenue stabilization and path to growth reversal
- Operating cash flow trajectory and monthly cash burn rate
- Operating margin improvement and gross profit conversion efficiency
- Cash runway remaining at current burn rate
- Management action on cost structure and revenue initiatives
Financial Metrics
Revenue
5.6M
Net Income
-8.2M
EPS (Diluted)
$1.25
Free Cash Flow
-6.1M
Total Assets
103.3M
Cash
15.0M
Profitability Ratios
Gross Margin
57.3%
Operating Margin
-130.9%
Net Margin
-147.7%
ROE
-13.2%
ROA
-8.0%
FCF Margin
-108.5%
Balance Sheet & Liquidity
Current Ratio
3.07x
Quick Ratio
2.62x
Debt/Equity
0.50x
Debt/Assets
0.0%
Interest Coverage
-3.80x
Long-term Debt
30.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-15T09:07:58.448014 |
Data as of: 2026-03-31 |
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