📊 NEPH Key Takeaways
Is Nephros Inc. (NEPH) a Good Investment?
Nephros demonstrates strong gross margins (57.4%) and solid 32.7% revenue growth in medical devices, with an fortress-like balance sheet (4.55x current ratio, 0.01x debt/equity). However, negative operating cash flow of -1.7M despite accounting profitability signals serious quality of earnings concerns, while extremely thin operating margins (1.9%) and minimal capital returns (ROE 1.3%) indicate the company must demonstrate significant operational improvement and cash flow conversion to justify investment at this small 5.2M revenue scale.
Nephros shows strong fundamental momentum with 32.7% revenue growth, 61.9% gross margin, and a shift to profitable, positive free cash flow. A cash-rich, nearly debt-free balance sheet and excellent liquidity provide resilience while operating leverage begins to improve margins. Sustained growth and incremental margin expansion would further strengthen returns.
Nephros Inc. Key Strengths (NEPH)
- Excellent gross margins at 57.4% indicating strong product pricing power and market fit
- Fortress balance sheet with 4.0M cash, 4.55x current ratio, and negligible debt (0.01x leverage)
- Solid top-line growth of 32.7% YoY despite small revenue base in medical device sector
- High gross margin (61.9%) with improving profitability
- Strong liquidity and minimal leverage (current ratio 4.06x; debt/equity 0.01x)
- Positive free cash flow with low capex requirements
NEPH Stock Risks: Nephros Inc. Investment Risks
- Critical red flag: negative 1.7M operating cash flow despite 140K net income suggests working capital stress or earnings quality issues requiring immediate investigation
- Severe operating leverage problem with only 1.9% operating margin and minimal capital returns (ROE 1.3%, ROA 1.0%) indicating nearly all gross profit consumed by operating expenses
- Extremely small revenue base (5.2M annually) with uncertain path to sustainable profitability; cash runway of ~2.4 years at current burn rate
- Small scale with thin operating margin (6.1%) may be volatile
- Uncertain durability of growth after a strong YoY surge
- Potential customer/regulatory concentration typical for niche med-tech
Key Metrics to Watch
- Operating cash flow conversion - must achieve positive OCF within next 2-3 quarters for sustainability
- Operating margin expansion and operating expense ratio as revenue scales
- Working capital management and days sales outstanding trends
- Operating margin % (and SG&A as % of revenue)
- Revenue growth YoY
Nephros Inc. (NEPH) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 4.55x current ratio provides a solid financial cushion.
NEPH Profit Margin, ROE & Profitability Analysis
NEPH vs Healthcare Sector: How Nephros Inc. Compares
How Nephros Inc. compares to Healthcare sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Nephros Inc. Stock Overvalued? NEPH Valuation Analysis 2026
Based on fundamental analysis, Nephros Inc. has mixed fundamental signals relative to the Healthcare sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Nephros Inc. Balance Sheet: NEPH Debt, Cash & Liquidity
NEPH Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Nephros Inc.'s revenue has grown significantly by 81% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.01 reflects profitable operations.
NEPH Revenue Growth, EPS Growth & YoY Performance
NEPH Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $4.9M | $140.0K | $0.01 |
| Q3 2025 | $3.5M | -$169.0K | $0.02 |
| Q2 2025 | $3.3M | -$169.0K | $0.02 |
| Q1 2025 | $3.5M | -$169.0K | $-0.02 |
| Q3 2024 | $3.5M | -$169.0K | $-0.02 |
| Q2 2024 | $3.3M | -$169.0K | $-0.03 |
| Q1 2024 | $3.5M | -$169.0K | $-0.02 |
| Q3 2023 | $2.4M | N/A | $-0.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Nephros Inc. Dividends, Buybacks & Capital Allocation
NEPH SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Nephros Inc. (CIK: 0001196298)
📋 Recent SEC Filings
❓ Frequently Asked Questions about NEPH
What is the AI rating for NEPH?
Nephros Inc. (NEPH) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 66% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are NEPH's key strengths?
Claude: Excellent gross margins at 57.4% indicating strong product pricing power and market fit. Fortress balance sheet with 4.0M cash, 4.55x current ratio, and negligible debt (0.01x leverage). ChatGPT: High gross margin (61.9%) with improving profitability. Strong liquidity and minimal leverage (current ratio 4.06x; debt/equity 0.01x).
What are the risks of investing in NEPH?
Claude: Critical red flag: negative 1.7M operating cash flow despite 140K net income suggests working capital stress or earnings quality issues requiring immediate investigation. Severe operating leverage problem with only 1.9% operating margin and minimal capital returns (ROE 1.3%, ROA 1.0%) indicating nearly all gross profit consumed by operating expenses. ChatGPT: Small scale with thin operating margin (6.1%) may be volatile. Uncertain durability of growth after a strong YoY surge.
What is NEPH's revenue and growth?
Nephros Inc. reported revenue of $5.2M.
Does NEPH pay dividends?
Nephros Inc. does not currently pay dividends.
Where can I find NEPH SEC filings?
Official SEC filings for Nephros Inc. (CIK: 0001196298) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is NEPH's EPS?
Nephros Inc. has a diluted EPS of $0.01.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is NEPH's fundamental grade?
Based on our AI fundamental analysis in June 2026, Nephros Inc. has a A grade with 66% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is NEPH stock overvalued or undervalued?
Valuation metrics for NEPH: ROE of 1.3% (sector avg: 15%), net margin of 2.7% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is NEPH's AI grade for 2026?
Our dual AI analysis gives Nephros Inc. a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is NEPH's free cash flow?
Nephros Inc.'s operating cash flow is $-1.7M, with capital expenditures of $55.0K. FCF margin is -33.1%.
How does NEPH compare to other Healthcare stocks?
Vs Healthcare sector averages: Net margin 2.7% (avg: 12%), ROE 1.3% (avg: 15%), current ratio 4.55 (avg: 2).