Nephros Inc. Common Stock (NEPH)

FairStock Score: 46/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am a value investor who wants durable earnings bought at a fair price. Nephros is a small water-filtration company for dialysis, hospitals, foodservice and hospitality; it has 36 employees and a $39.0M market cap at the 2026-10-13 close of $3.59. The top line is improving: in fiscal year 2025, the year ended 2025-12-31, revenue was $18.8M versus $14.2M in fiscal year 2024, the year ended 2024-12-31. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $6.0M versus $4.4M in fiscal Q2 2025, the quarter ended 2025-06-30. Profitability has turned: fiscal year 2023, the year ended 2023-12-31, had a net loss of $1.6M; fiscal year 2024 had net income of $74,000; fiscal year 2025 had net income of $1.2M. Fiscal Q2 2026 net income was $1.2M, a 19.89% margin. That is encouraging, but one quarter is not a moat. FairStock's calculations show ROE of 16.10%, ROCE of 7.33%, and low D/E of 0.07. Yet trailing free cash flow is -$661,000 and FairStock's FCF yield is -1.7%. At the 2026-10-13 close, FairStock puts P/E at 22.44, P/B at 3.26, EV/EBITDA at 19.17, and the Graham Number at $1.99, a -80.40% margin of safety. The FairStock Piotroski F-Score is 6/9, but the FairStock Altman Z-Score of -5.02 signals fragility. Nephros is classified as a TURNAROUND because it returned to profit after a loss within the last three years. I would want consistent cash earnings before trusting the current price.

In plain English: Nephros sells water filters used in dialysis centers, hospitals, foodservice and hospitality. The business has grown sales and recently became profitable, but it is still very small and used cash over the past year. At $3.59 on 2026-10-13, the stock looks expensive compared with its reported profit and net assets, so the price looks more hopeful than cheap.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer