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Against this backdrop, the shares of medical devices maker ReWalk Robotics Ltd. (RWLK) are rallying on a Breakthrough Device Designation from the Food and Drug Administration for one of its devices. However, the company does not possess sufficient fundamental strength to justify the rally. RWLK’s revenue decreased 13.9% year-over-year to $1.44 million in its fiscal second quarter, ended June 30, while its non-GAAP net loss increased 7.7% from the same period last year to $2.87 million. Moreover, RWLK is trading at a stretched valuation. Its 16.48 forward Price/Sales multiple is currently trading 105.1% above the 8.03 industry average.
So we think small-cap medical equipment stocks Cardiovascular Systems, Inc. (CSII), Varex Imaging Corporation (NASDAQ:VREX), and Utah Medical Products, Inc. (UTMD) are better positioned to capitalize on the industry tailwinds.
