IRADIMED screens as a rare small-cap quality compounder: debt-free, high gross margin, high ROIC, founder-led ownership and a clean cash balance. The issue is not the business, but the price. At about $82.49, the stock already capitalizes a successful 3870 pump ramp; a base-case fair value near $79 leaves little margin of safety unless H2 bookings convert faster than guidance.
the target multiple is derived from observed medtech valuation anchors and adjusted numerically for IRMD's margin/ROIC premium (+20%) and slower near-term revenue growth versus faster device peers (-5%), landing around 10.0x FY26E EV/Revenue. Cross-check: 38x FY26E GAAP EPS midpoint of $1.98 implies ~$75, within 5% of the bridge value. Sensitivity: each +/-2.0x sales multiple changes FV by about +/-$14.60 per share. Not investment advice.
| Component | Assumption | USD/share |
|---|---|---|
| Core medtech EV | $93.5M FY26E revenue midpoint x 10.0x EV/Revenue / 12.79M shares | +73.11 |
| Net cash floor | $59.08M cash and no financial debt / 12.79M shares | +4.62 |
| 3870 platform option | 25% probability x $140M incremental EV from quad-stack adoption / 12.79M shares | +2.74 |
| Deferred revenue obligation | -$7.53M deferred revenue at Jun. 30, 2026 / 12.79M shares | -0.59 |
| Launch/regulatory reserve | -$10.0M reserve for 3870 start-up inefficiency, FDA and supply-chain execution / 12.79M shares | -0.78 |
| FV base case | Explicit sum: 73.11 + 4.62 + 2.74 - 0.59 - 0.78 | 79.10 |
Short interest is not high as a percentage of shares outstanding, but the limited float creates a moderate days-to-cover figure. The setup is more "quality premium at risk" than classic squeeze.
| Item | FY2023 | FY2024 | FY2025 | TTM Jun-26 | Guidance 2026 |
|---|---|---|---|---|---|
| Revenue | $65.6M | $73.2M | $83.8M | $86.3M | $91.0M-$96.0M |
| Gross profit | $50.2M | $56.4M | $64.3M | $65.5M | N/D - margin implied by launch ramp |
| Operating income | $20.0M | $22.0M | $26.2M | $27.6M | N/D |
| Net income | $17.2M | $19.2M | $22.5M | $23.1M | GAAP EPS $1.90-$2.05 |
| Net cash | $47.7M | $52.2M | $51.2M | $59.1M | Debt-free stance expected |
| Metric | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Revenue ($M) | 20.4 | ~21.5 | ~22.4 | 22.0 | 20.5 |
| Gross margin % | 78% | N/D | N/D | ~76% | 74% |
| Net income ($M) | 5.8 | ~5.7 | ~6.3 | 5.8 | 5.2 |
| Cash EOP ($M) | N/D | N/D | 51.2 | N/D | 59.1 |
Business model - MRI-compatible device niche
MRI IV Infusion Pumps ~$30-33M FY26E (32-35% revenue) ramping MRidium 3870 launch is the main growth lever. Q2 pump revenue dipped during transition, but more than 70% of new pump orders used the quad-stack configuration. Patient Monitoring Systems ~$28-31M FY26E (30-33% revenue) record bookings 3880 monitor systems support procedures where patients cannot be disconnected from vital monitoring during MRI scans; domestic bookings set a record in Q2. Disposables, Service & FMD ~$31-33M FY26E (33-35% revenue) recurring base Disposables and extended maintenance revenue provide recurring economics; ferromagnetic detection remains small but grew from a low base in H1 2026.
Legal, regulatory and risk analysis
SWOT analysis
- +Debt-free balance sheet with $59.1M cash.
- +High gross margin niche with MRI safety specialization.
- +Founder ownership and high insider alignment.
- +Q2 guidance reaffirmed despite launch transition.
- −Revenue base remains below $100M.
- −Premium valuation reduces error tolerance.
- −R&D spend is low relative to medical-device innovation risk.
- −Liquidity and float are limited.
- →3870 quad-stack adoption can lift average order value.
- →International sales grew 33% in H1 2026.
- →Recurring disposables and service attach can compound.
- →Gross margin recovery can re-expand earnings.
- !Hospital capex pauses can delay device orders.
- !Regulatory or manufacturing issue would hit the whole franchise.
- !Analyst-target gap could close downward if execution is ordinary.
- !Tariffs and component constraints can pressure costs.
Summary by assessment area
- Specialized niche, high margins, debt-free balance sheet.
- Founder alignment and recurring disposables improve durability.
- The 3870 pump ramp is the key H2 proof point.
- Gross margin must recover after Q2 launch inefficiencies.
- Base FV is slightly below the price used.
- Upside requires a bull-case conversion of bookings into revenue.
Sources: IRADIMED Q2 2026 release / Exhibit 99.1 filed July 31, 2026; IRADIMED Form 10-Q for quarter ended June 30, 2026; StockAnalysis financials, statistics and forecast pages checked Sep. 2026; MarketBeat / Investing.com / TipRanks analyst target pages; ChartExchange and Yahoo Finance Japan historical quote pages; Finshort short-interest page. Market data used: IRMD ~$82.49 intraday Sep. 14, 2026 at 10:02 ET; cross-check: $82.22 close Sep. 11, 2026, 52-week range $67.84-$107.90, shares outstanding ~12.79M, market cap about $1.05B-$1.06B. Short interest: 697,251 shares, 5.45% of shares outstanding. This document is for informational purposes only and does not constitute financial or investment advice.