Inspira Technologies Oxy B.H.N. Ltd. (IINN) in Ra'annana, Israel, made its stock market debut on July 14, 2021. The specialty medical device company researches, develops, manufactures, and markets respiratory support technology as an alternative to invasive mechanical ventilation (MV) to treat respiratory failure. 

Its shares surged more than 36% in price on January 31, after the company announced a strategic distribution agreement with Glo-Med Networks Inc. to expand its market reach in the United States.

However, the stock has declined 22% over the past six months and 11.3% over the past month, given that its operational performance still leaves much to be desired.

Click here to checkout our Healthcare Sector Report for 2022

Here is what could shape IINN's performance in the near term:

Stiff Competition

The medical devices industry has evolved rapidly in recent years. And IINN, which is still in its early development phase, confronts stiff competition from market giants such as Medtronic PLC (MDT) and Abbott Laboratories (ABT).

Weak Financials

IINN's net profit increased 536.8% year-over-year to $2.22 million for the third quarter, ended Sept. 30, 2021. However, its general and administrative expenses increased 353.9% year-over-year to $2.22 million, while its operating loss grew 80.4% from the prior-year quarter to $2.94 million.

Bleak Profitability

Its trailing-12-month ROC and ROA stood at negative 153.8% and 51.3%, respectively, compared to the negative 18.6% and 22.4%. industry averages.

POWR Ratings Reflect Uncertainty

IINN has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. IINN has a D grade for Quality, which is justified given the company's weak financials.

Among 165 stocks in the D-rated Medical – Devices & Equipment industry, IINN is ranked #146.

Beyond what I have stated above, one can view IINN ratings for Momentum, Value, Growth, Sentiment, and Stability here.

Bottom Line

While IINN is making efforts to boost its fundamentals through strategic collaborations, it has yet to generate meaningful revenue. Therefore, given the company's weak financials and high industry-wide competition, we think the stock is best avoided now.

How Does Inspira Technologies Oxy B.H.N Ltd. (IINN) Stack Up Against its Peers?

While IINN has an overall D rating, one might want to consider its industry peers, Fonar Corporation (FONR), ICU Medical Inc. (ICUI), and Electromed Inc. (ELMD), which have an overall A (Strong Buy) rating.

Click here to checkout our Healthcare Sector Report for 2022

IINN shares were trading at $2.98 per share on Tuesday afternoon, down $0.31 (-9.42%). Year-to-date, IINN has declined -28.37%, versus a -5.49% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

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