4 days ago
Kestra Stock Slips as Heavy Q4 Loss Overshadows Big Revenue Gains
Kestra Medical Technologies (KMTS, Financials) just wrapped up its fiscal year with a mix of wins and warning signs; and Wall Street noticed. Despite huge gains in revenue, the company's Q4 net loss more than doubled, and that was enough to rattle investors. Shares slipped 2.4% following the report.
Warning! GuruFocus has detected 2 Warning Signs with KMTS.
The numbers paint a complicated picture. On one hand, Kestra's revenue for the fourth quarter hit $17.2 million, up 71% year over year. For the full fiscal year? A massive 115% jump to $59.8 million signaling that hospitals and physicians are taking a serious interest in Kestra's wearable heart monitoring tech.
But then there's the other side: Kestra posted a net loss of $51.1 million for Q4 alone more than double the loss from the same time last year. On a per-share basis, that's -$2.21.
CEO Brian Webster remained upbeat. We capped an exciting year with a very strong finish, he said; highlighting that over 3,900 prescriptions were written for the company's ASSURE system, a 43% increase from the previous year. The product which helps patients during cardiac recovery is clearly gaining ground.
Margins are improving too: Gross margin for Q4 came in at 44.3%, up from 13.9% last year. That means Kestra is getting more efficient, and likely making better deals with insurance networks.
However, costs are still climbing fast. Operating expenses hit $55.8 million in Q4; a chunk of that was tied to stock-based compensation ($22.3 million) and professional services ($3.8 million) related to the company's IPO in March.
The company isn't slowing down. It expects $85 million in revenue for fiscal 2026 a 42% increase and it's sitting on $237.6 million in cash, which gives it room to operate, invest, and keep growing.
But for now, the market is asking: How long will it take Kestra to turn that growth into profit?
This article first appeared on GuruFocus.
