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Ekso Bionics Holdings, Inc. (NASDAQ:EKSO): Here's What We Want To See Now

Ekso Bionics Holdings, Inc. (NASDAQ:EKSO): Here's What We Want To See Now
Written by
Chris Sandburg
Published on
July 24, 2017
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Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) is a company that we have come back to on a number of occasions over the last twelve months. It's also one that, across the period, hasn’t done particularly well from a valuation perspective. The company is down 56% year to date and close to 70% across the last twelve months. During the middle of last week, Ekso Bionics lost 25% on its share price on the back of an offering announcement. As things stand, the company trades for around $1.73 and a market capitalization of $44 million.Sentiment is understandably weak and shareholders that have held onto positions and, in turn, that have these positions deteriorate in value over the last 12 months, are faced with something of a dilemma – cut losses or remain in the stock in anticipation of a recovery.Our take?We think that, regardless of action over the last 12 months, this company remains strongly positioned in its sector to appreciate longer-term and that – at current prices – the fundamentals that underpin a bullish thesis remain in place, but do so at a discount to the cost of an exposure this time last year.For those new to this company, Ekso Bionics is a healthcare technology play that has developed what it calls the Ekso GT – a type of exoskeleton designed to help immobile patients recover from spinal injuries and strokes. In this category of patients, recovery time is long and drawn out, with the vast majority having to spend months or years learning how to walk and building muscle that has deteriorated over time subsequent to injury. Current standard of care therapies in the space basically involve filling this recovery period with various types of physiotherapy and it is a slow and painful process for the patients.Ekso GT is designed to help get patients moving quicker and easier than is generally the case with the current program; doing so by offering a combination of motor support and skeletal reinforcement. The exoskeleton is essentially a type of suit that reinforces the legs and lower parts of the body and can be mechanically manipulated to replicate the gait of the person undergoing treatment.A few things are important to recognize here.The first is that this technology is poised to dramatically impact how patients in this indication (and across a wide variety of other indications) recover from their injuries and – just as importantly – that the technology developed by Ekso Bionics is the only one clinically approved in the US for use in patients suffering from spinal injuries and strokes.This is both a blessing and a curse.On one hand, the company has a revolutionary technology and a path to market with little to no competition. On the other, however, it is having to basically establish a brand-new market and this costs both time and money – something that a large portion of retail investors are not overly happy to accept at this end of the market.With that said, management has spent the last 12 months laying a framework from which it can build into the space and – over the coming 12 months – we should start to see the laying of said framework translate to value-add operational advance; specifically, in this instance, the shipping of more Ekso GT units to healthcare facilities in the US and the boosting of top line in conjunction with said shipping drive.The most recent offering comes by way of a rights offering (which isn’t particularly appealing to shareholders and has – perhaps rightly – left a spate of disgruntled investors in its wake) that will see the company raise up to $34 million gross. Management has outlined three areas of focus from a use of proceeds perspective: expanding clinical, sales and marketing initiatives, increasing research, development and commercialization activities with respect to a home use version of the tech and the same, but in an industrial use version.For us, we want to see the company forget about the latter two of these focuses.Expanding sales in the currently approved and available market is what is going to return some much-needed value to shareholders and any indication that management is focused on this and this alone is great news from our perspective. In other words, if the company is going to subject shareholders to the issue driven dilution, and it hasn't been afraid to do so of late, then it needs to allocate the capital raised towards initiatives that return value to said shareholders.That's what we're watching for throughout the remainder of 2017.Check out our previous coverage of this one here!We will be updating our subscribers as soon as we know more. For the latest updates on EKSO, sign up below!Image courtesy of FlickrDisclosure: We have no position in EKSO and have not been compensated for this article.

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