BrainsWay Ltd. American Depositary Shares (BWAY)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Generates $814,250 in annual free cash flow (0.1% yield on market cap)
• Solid return on equity of 11.3% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.09, providing financial flexibility
• Altman Z-Score of 9.4 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 27.4% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($3) with negative 483% margin of safety—limited downside protection

AI Analysis

BrainsWay Ltd. American Depositary Shares is a micro-cap healthcare company valued at $642 million. The business generates $52 million in annual revenue with a 5.6% net margin and $814,250 in free cash flow. From a quality standpoint, BrainsWay shows Altman Z-Score of 9.4 confirms fortress-level solvency and adequate 11% ROE. On valuation, the stock is commanding a steep 87.5x multiple, with trades far above its Graham Number ($3) with no margin of safety. Growth dynamics show revenue growing at 27.4% and profit growth of 89.5%. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

BrainsWay's 27% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $814,250 in annual free cash flow (0.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 88x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer