LUNG

Pulmonx is a commercial-stage medtech built around one FDA-approved product, the Zephyr Valve for severe emphysema. The top line is the bright spot: revenue has compounded from $48.4M (FY2021) to $90.5M (FY2025), +8.0% in the latest year, at a 74.2% gross margin with 95% of sales sold direct into ~500 high-volume U.S. hospitals plus reimbursed positions across Europe, Australia, South Korea and Japan. Payor coverage keeps broadening (Aetna, Humana, most large BCBS plans, and United Healthcare dropping its 'experimental' label). Crucially, the market cap is only $58.7M against $90.5M of revenue — a 0.6x P/S — and cash of $69.8M actually exceeds the entire market cap. On a sum-of-parts view the stock trades near cash, which is the core of the bull case.

The problem is that this is a business that consistently loses ~60 cents on every revenue dollar. FY2025 operating margin was -59.3% and net loss was -$54.0M, only marginally better than the -$56.4M and -$60.8M of prior years despite four years of double-digit revenue growth — the loss curve is barely bending. Operating cash flow was -$32.4M and burn shows little sign of turning positive. The 10-K states plainly: 'We have incurred net losses since our inception... and we expect to continue to incur additional losses,' with a $521.6M accumulated deficit. With $69.8M cash burning ~$32M/year and $37.0M of term debt on the balance sheet, the runway is roughly two years before another raise — and the filing explicitly flags the need 'to raise additional capital on acceptable terms, or at all.' Shares already grew 6.1% in the year, and at $1.39 (near lows, -5.4% on the day) any equity raise would be brutally dilutive.