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Nano-X: On the Right Path but Milestones Still Need to Be Met

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Since going public in August last year, Nano-X (NNOX) has come under intense scrutiny. The company, which aims to revolutionize the X-ray imaging space, has been the subject of short reports, which have essentially called it a fraud.

However, the accusations should finally be put to rest now that Nano-X has received the FDA’s clearance for its single-source Nanox.ARC.

The 510(k) was granted last Friday and while Oppenheimer analyst Suraj Kalia expected approval, the clearance undoubtably places Nano-X further down the path to reach its goals.

“While this news removes a key initial regulatory hurdle, we believe investor attention will now shift to the multi-source 510(k) submission, production ramp-up, and commercial updates,” Kalia said. “We continue to view Nanox as a potentially disruptive technology, now one step closer to commercialization, but with important milestones yet to overcome.”

The multi-source Nanox.ARC is the system’s commercial version and will also need to be cleared by the FDA.

The company has said it remains on track to begin shipping devices in 4Q21 and 1Q22 and anticipates hitting its target of 15,000 units by the end of 2024.

“However, based on our checks and analysis of Nanox's contracts,” Kalia added, “We believe FDA clearance of the Multi-Source 510(k) is a requirement to complete the customer acceptance process for Nanox's systems.”

Nano-x plans on submitting the application for the multi-source Nanox.ARC and the Nanox.CLOUD sometime this year.

Nanox’ novel X-ray device is a lot cheaper than the ones currently used and the company’s unique business proposition involves a MSaaS (Medical Software as a Service) subscription model.

Kalia says Nano-X’ technology is “exciting,” however, the analyst also notes that several milestones, including the multi-source clearance, its evaluation by partners and the need to demonstrate “manufacturing consistency,” still need to be overcome. Therefore, the analyst believes a prudent outlook is a necessity.

For now, then, Kalia sticks to a Perform (i.e. Hold) rating and refrains from suggesting a price target. (To watch Kalia’s track record, click here)

Over the last 3 months, only one other analyst has chipped in with a Nano-X review. The additional Buy means the X-ray disruptor qualifies with a Moderate Buy consensus rating. Going by the $67 average price target, NNOX shares could be changing hands for a 37% premium a year from now. (See NNOX stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.