Pro-Dex, Inc. (PDEX) | Investment Case

1. Company Snapshot

1.a. Company Description

Pro-Dex, Inc.designs, develops, and manufactures powered surgical instruments for medical device original equipment manufacturers worldwide.The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets.

It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries.The company was founded in 1978 and is headquartered in Irvine, California.

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1.b. Last Insights on PDEX

Pro-Dex, Inc.'s recent performance was negatively impacted by its Q4 earnings miss, with quarterly earnings of $0.36 per share, falling short of the Zacks Consensus Estimate of $0.47 per share. This compares to earnings of $0.46 per share a year ago. The company's fiscal 2025 fourth quarter and full-year results, announced on September 4, 2025, likely contributed to the negative sentiment. According to Zacks, the company's earnings estimate revisions may not translate into further strength in the near term.

1.c. Company Highlights

Last Price	40.22
Change Percentage	-1.18%
Open	41.31
Previous Close	40.7
Market Cap ( Millions)	131
Volume	14778
Year High	70.26
Year Low	23.47
M A 50	32.17
M A 200	42.26

FCF Yield	-1.58%
Dividend Yield	0.00%
ROE	30.82%
Debt / Equity	33.23%
Net Debt / EBIDTA	98.66%
Price To Book	3.16
Price Earnings Ratio	11.72
Price To FCF	-63.25
Price To sales	1.87
EV / EBITDA	10.73

2. Transcript Summary

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3. NewsRoom

Head to Head Review: Pro-Dex (NASDAQ:PDEX) vs. Lifevantage (NASDAQ:LFVN)

Nov -18

Source: defenseworld.net

Pro-Dex, Inc. (PDEX) Q1 Earnings and Revenues Top Estimates

Oct -30

Source: zacks.com

Pro-Dex, Inc. Announces Fiscal 2026 First Quarter Results

Oct -30

Source: accessnewswire.com

D.A. Davidson & CO. Purchases New Position in Pro-Dex, Inc. $PDEX

Oct -30

Source: defenseworld.net

Pro-Dex, Inc. Announces Clarification Related to Trading Symbol

Oct -16

Source: accessnewswire.com

Pro-Dex, Inc. (PDEX) Lags Q4 Earnings and Revenue Estimates

Sep -04

Source: zacks.com

Pro-Dex, Inc. Announces Fiscal 2025 Fourth Quarter and Full-Year Results

Sep -04

Source: accessnewswire.com

Strength Seen in ProDex (PDEX): Can Its 8.2% Jump Turn into More Strength?

Jul -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.43%)

6. Segments

Medical Devices

Expected Growth: 3.5%

Pro-Dex, Inc.'s medical devices segment growth of 3.5% is driven by increasing demand for minimally invasive surgical instruments, expansion into emerging markets, and strategic partnerships. Additionally, advancements in robotics and artificial intelligence are fueling innovation, while an aging population and rising healthcare expenditure support sustained growth.

Repairs

Expected Growth: 3.2%

Pro-Dex, Inc.'s 3.2% growth in repairs is driven by increasing demand for medical devices, expansion into new markets, and strategic partnerships. Additionally, the company's focus on quality and customer satisfaction has led to repeat business and positive word-of-mouth, contributing to the growth.

NRE & Prototype

Expected Growth: 3.8%

Pro-Dex Inc.'s NRE & Prototype segment growth of 3.8% is driven by increasing demand for medical devices, expansion into new markets, and investments in research and development. Additionally, the company's focus on innovation and quality has led to higher customer retention rates and new business opportunities.

Discounts & Other

Expected Growth: 2.8%

Pro-Dex, Inc.'s 2.8% growth in Discounts & Other is driven by increasing sales of medical device components, expansion into new markets, and strategic partnerships. Additionally, the company's focus on operational efficiency and cost reduction initiatives have contributed to the growth. Furthermore, the company's ability to negotiate better prices with suppliers has also positively impacted the segment.

Industrial and Scientific

Expected Growth: 3.9%

Pro-Dex Inc.'s Industrial and Scientific segment growth of 3.9% is driven by increasing demand for precision-engineered products, expansion into new markets, and strategic partnerships. Additionally, investments in research and development, coupled with a strong focus on innovation, have enabled the company to capitalize on emerging trends in the industrial and scientific sectors.

Dental and Component

Expected Growth: 3.6%

Pro-Dex, Inc.'s Dental and Component segment growth of 3.6% is driven by increasing demand for dental implants, rising adoption of digital dentistry, and growing need for precision-engineered components in medical devices. Additionally, the company's focus on innovation, quality, and customer service has led to market share gains and expansion into new geographies.

7. Detailed Products

Medical Device Products

Pro-Dex, Inc. designs and manufactures medical device products, including surgical and orthopedic instruments, and implantable devices.

Laser Machining Services

Pro-Dex, Inc. offers laser machining services for precision cutting, drilling, and welding of medical devices and instruments.

Clean Room Assembly and Packaging

Pro-Dex, Inc. provides clean room assembly and packaging services for medical devices, ensuring sterile and contamination-free products.

Engineering and Design Services

Pro-Dex, Inc. offers engineering and design services for medical devices, including design, development, and testing.

8. Pro-Dex, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pro-Dex, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the medical device industry.

Bargaining Power Of Customers

Pro-Dex, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are critical to its customers' operations, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Pro-Dex, Inc. relies on a few key suppliers for critical components, giving them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate contracts mitigate this risk.

Threat Of New Entrants

The medical device industry has high barriers to entry, including regulatory hurdles and significant capital requirements, making it difficult for new entrants to compete with Pro-Dex, Inc.

Intensity Of Rivalry

The medical device industry is highly competitive, with several established players competing for market share. Pro-Dex, Inc. must continually innovate and improve its products to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.89%
Debt Cost	4.80%
Equity Weight	68.11%
Equity Cost	6.69%
WACC	6.09%
Leverage	46.82%

11. Quality Control: Pro-Dex, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Utah Medical Products

A-Score: 5.4/10

Value: 4.7

Growth: 3.0

Quality: 8.4

Yield: 4.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

Pro-Dex

A-Score: 5.2/10

Value: 6.7

Growth: 6.0

Quality: 7.6

Yield: 0.0

Momentum: 9.0

Volatility: 1.7

1-Year Total Return ->

LeMaitre Vascular

A-Score: 4.8/10

Value: 1.2

Growth: 7.4

Quality: 7.0

Yield: 2.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

Warby Parker

A-Score: 4.5/10

Value: 3.3

Growth: 7.4

Quality: 4.1

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

Nephros

A-Score: 4.4/10

Value: 1.4

Growth: 6.3

Quality: 7.7

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

OraSure Technologies

A-Score: 3.4/10

Value: 7.1

Growth: 4.2

Quality: 5.0

Yield: 0.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

34.64%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.09%

Pro-Dex, Inc. - US74265M2052

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PDEX

1.c. Company Highlights

Higher Growth

Better Quality

Less Volatile

Earnings Miss

Revenues Beats

Average Quality

Stable Momentum

Medium Volatility

Strong Momentum

Earnings Beats

Fairly Valued

Expensive

Revenues Miss

Average Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.43%)

6. Segments

Medical Devices

Expected Growth: 3.5%

Repairs

Expected Growth: 3.2%

NRE & Prototype

Expected Growth: 3.8%

Discounts & Other

Expected Growth: 2.8%

Industrial and Scientific

Expected Growth: 3.9%

Dental and Component

Expected Growth: 3.6%

7. Detailed Products

Medical Device Products

Laser Machining Services

Clean Room Assembly and Packaging

Engineering and Design Services

8. Pro-Dex, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Pro-Dex, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.22$

Current Price

40.22$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA