It develops and markets incision-free therapeutic systems for the image-guided ablation of diseased tissue in North America and Europe. Profound Medical’s flagship TULSA-PRO system uses MRI-guided robotic transurethral thermal ultrasound and temperature feedback controls to precisely ablate targeted areas of prostate tissue, both malignant and benign.
The company also offers Sonalleve, an MRI-guided thermal therapy platform that treats uterine fibroids, adenomyotic tissue, bone metastasis pain, osteoid osteoma and benign tumors.
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A bull case for investing in this small-cap TSX stock
Profound Medical posted an 87% increase in revenue in the third quarter as the medical device company continues to gain traction with its MRI-guided prostate treatment technology. The Toronto-based company brought in $5.3 million for the three months ended September 30, a sharp increase from $2.8 million in the same period last year.
The company now has 70 TULSA-PRO systems installed in hospitals and treatment centers, with a further 93 locations in the late stages of the sales pipeline. Chief Executive Arun Menawat said the company is on track to have at least 75 installations by the end of the year.
Recurring procedure revenue was $4.1 million in the quarter, while one-time equipment sales added $1.2 million. Gross margins improved from 63.1% a year earlier to 74.3%. It reported a net loss of $8 million, or $0.26 per share, compared with $9.4 million in the third quarter of 2024. Profound ended the third quarter with nearly $25 million in cash, providing it with liquidity for the next three quarters.
Profound Medical offers a treatment that uses ultrasound waves, guided by MRI imaging, to destroy prostate tissue without surgical incisions.
Patients typically leave the hospital the same day with minimal bleeding or serious side effects. Medicare now covers the procedure after approval of a Category 1 billing code earlier this year.
Some commercial insurers are also beginning to provide reimbursement on a case-by-case basis, with payments ranging from $25,000 to $65,000 per treatment.
Profound launched new software this quarter that reduces procedure time for treating benign prostate enlargement, a condition that affects millions of men.
- The upgrade will allow doctors to complete treatments in 60 to 90 minutes, making it competitive with other therapies.
- Company chairman Mathieu Burtnyk said the technology can also target both cancer and benign tissue in one session.
- The company is testing broader applications beyond prostate care. The Sonalleve system uses focused ultrasound to treat uterine fibroids and is being screened for pancreatic cancer.
Chief Financial Officer Rashed Dewan said the company expects to reduce cash burn as revenue grows and ultimately achieve positive cash flow status. Management maintained its target of 70% sales growth by 2025.
Is this Canadian stock undervalued?
Analysts tracking Profound Medical predict that revenue will increase from $15.2 million in 2024 to $142 million in 2029. Additionally, it is expected to report free cash flow (FCF) of $63 million in 2028, compared to outflows of $32.5 million in 2025.
If the TSX stock is priced 20 times lower than the FCF, which is quite cheap, it could more than triple in the next three years.
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