KRMD

KRMD is executing a credible turnaround. FY2025 revenue grew 22.2% to $41.1M, and the loss narrowed to just -$2.64M from -$6.07M in 2024 and a -$13.7M trough in 2023 — a four-year sequence of accelerating revenue and shrinking losses. Crucially, the company generated positive operating cash flow ($462K, up 245%) for the first time in this window, and the balance sheet is clean: $17.0M equity against only ~$11.2M liabilities (0.65x), $8.87M cash, and negligible debt. Gross margin of 62.3% is healthy for a device maker. The growth mix is encouraging — international core surged 80.0% on new EU market entry while domestic core rose 11.0% on SCIg volume and account share gains, per the MD&A.

The problem is that the stock already reflects this. At $4.49 the company trades at 5.1x sales and remains GAAP-unprofitable (operating margin -7.2%, ROE -15.5%), with an accumulated deficit of -$32.0M. Positive operating cash flow is real but razor-thin ($462K against $933K of capex — free cash flow is still negative), so the 'inflection' is not yet self-funding growth. You are paying a growth multiple for a business that has not yet proven it can convert 20%+ top-line growth into durable profit; SG&A still consumes 57% of revenue and gross margin actually slipped 110bps on tariffs and materials costs.