NVCR

NovoCure is a TTFields-therapy device company whose financials are quietly improving but not yet healthy. Revenue reaccelerated to $655M (+8.3%) after a 2023 dip to $509M, and the net loss has narrowed three years running — from -$207M (2023) to -$169M (2024) to -$136M (2025). Gross margin is a genuinely attractive 74.5%, typical of a recurring-fee device-plus-disposable-array model, and at a $1.76B market cap the stock trades at just 2.7x sales. For a re-accelerating medtech with that margin profile, the valuation is undemanding rather than stretched, which is what keeps this a hold rather than an avoid.

The quality concern is that the business still does not pay for itself. Operating margin is -23.5%, ROE is -40%, and operating cash flow swung to -$49M (down 85.9% YoY), so the improving income statement has not yet translated into self-funding. Headline cash of $93.5M (down 42.9%) looks alarming in isolation, but current assets of $647M against current liabilities of $223M (≈2.9x current ratio) imply a sizeable short-term-investment cushion behind that cash line — liquidity is adequate, not fragile. Less comforting: long-term debt doubled to $195M, the accumulated deficit is -$1.29B, and shares grew 3.5%, so the funding mix is tilting toward debt and dilution even as losses shrink.