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Rockwell Medical on Expansion Spree: Should You Buy the Stock Now?
RMTIRockwell Medical(RMTI) ZACKS·2024-10-18 15:36

Core Viewpoint - Rockwell Medical (RMTI) has experienced significant stock growth and positive developments, including new product launches and distribution agreements, leading to increased investor optimism [1][6]. Company Performance - RMTI stock has surged 86.5% over the past three months, outperforming the industry rise of 10.7% and the benchmark increase of 5.6% [1]. - The company has achieved a steady revenue growth path for the first time, projecting over 100millioninannualsales[6].−RMTIhasreportedanimprovingtrendingrossprofitandgrossmargin,movingfromnegativetoconsistentlypositivefigures[6].BusinessExpansion−RMTIenteredafive−yeardistributionagreementwithBioNuclearforhemodialysisproductsintheDominicanRepublic[7].−ThecompanyexpandeditsdistributionagreementwithAtlanticMedicalInternational,aleadingsupplierinBermuda[7].−AproductpurchaseagreementwasmadewithamajorhealthsystemintheMountainWestregionoftheU.S.forvarioushemodialysisproducts[8].−AdistributionagreementwasexecutedwithNiproMedicalinJapanforhemodialysisconcentrates[8].MarketPositionandCompetitors−RMTIhasoutperformedkeyrivalsEDAPTMSandIRIDEX,whichhaveseendeclinesof48100 million in annual sales [6]. - RMTI has reported an improving trend in gross profit and gross margin, moving from negative to consistently positive figures [6]. Business Expansion - RMTI entered a five-year distribution agreement with BioNuclear for hemodialysis products in the Dominican Republic [7]. - The company expanded its distribution agreement with Atlantic Medical International, a leading supplier in Bermuda [7]. - A product purchase agreement was made with a major health system in the Mountain West region of the U.S. for various hemodialysis products [8]. - A distribution agreement was executed with Nipro Medical in Japan for hemodialysis concentrates [8]. Market Position and Competitors - RMTI has outperformed key rivals EDAP TMS and IRIDEX, which have seen declines of 48% and 19.1% respectively over the same period [2][1]. - The Zacks Consensus Estimate for RMTI's 2024 earnings has improved, with losses projected to narrow from 14 cents to 3 cents [9]. Future Outlook - For 2025 and beyond, RMTI aims to grow its concentrates business and maintain annual revenues above 100 million with gross margins up to 30% [10]. - The company is also focused on expanding beyond concentrates [10].