olivLaw · US equity research
Pro-Dex, Inc. PDEX
Surgical & Medical Instruments & Apparatus · SIC 3841 · Vertical: Surgical & Medical Instruments & Apparatus (SIC 3841)
Pro-Dex designs and manufactures battery-powered and electric surgical drivers and shavers used mainly in orthopedic, thoracic and craniomaxillofacial procedures, sold mostly through medical device distributors. In fiscal 2026 net sales rose 16% to 77.5 million USD, and the company expanded through the APM acquisition, which makes parts for aerospace and defense.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 02 Nov 2026, Pro-Dex, Inc. (PDEX) stock was 57.65 USD (−0.88% on the day), with market capitalisation 184.5 m USD, P/E 15.9 on diluted EPS of 3.63 USD over the last 12 months, beta 0.75, 52-week range 28.91–73.41 USD. Latest reported quarter (Q1 2027): revenue of 20.6 m USD (+11.0% YoY), net income of 3.0 m USD (−34.9% YoY), diluted EPS 0.92 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 37.6
- weak (30–45)
- Bollinger (20, 2)
- 57.05 – 65.11
- in the lower half of the band · %B 0.07 · band width 13.2%
- SMA 50 / 200
- 64.61 / 56.64
- mixed trend
- MACD (12, 26, 9)
- -1.52 / -1.43
- MACD below signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −10.0% | −2.3% | −7.7 pp | — |
| 3 months | −9.4% | −0.8% | −8.6 pp | — |
| 6 months | +12.5% | +4.7% | +7.8 pp | — |
| Year to date | +49.8% | +10.2% | +39.7 pp | — |
| 1 year | +59.1% | +10.3% | +48.8 pp | −15.5% |
| 3 years | +220.3% | +73.0% | +147.2 pp | −10.3% |
| 5 years | +129.5% | +61.8% | +67.7 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q1 2027 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 | Q4 '26 | Q1 '27 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 16.8 m | 17.4 m | 17.5 m | 18.5 m | 18.7 m | 19.9 m | 20.4 m | 20.6 m |
| Cost of revenue | 11.7 m | 11.6 m | 14.0 m | 13.2 m | 12.9 m | 13.8 m | 13.3 m | 13.7 m |
| Gross profit | 5.1 m | 5.8 m | 3.5 m | 5.4 m | 5.7 m | 6.1 m | 7.1 m | 6.9 m |
| Research & development | 942.0 k | 947.0 k | 905.0 k | 768.0 k | 734.0 k | 827.0 k | 1.0 m | 1.2 m |
| SG&A | 1.4 m | 1.2 m | 1.2 m | 1.5 m | 1.8 m | 2.2 m | 2.5 m | 2.1 m |
| Operating income | 2.7 m | 3.6 m | 1.3 m | 3.1 m | 3.3 m | 3.1 m | 3.5 m | 3.5 m |
| Depreciation & amortisation | 313.0 k ≈ | 310.0 k ≈ | 314.0 k | 311.0 k | 314.0 k ≈ | 363.0 k ≈ | 406.0 k | 403.0 k |
| Interest expense | 204.0 k | 246.0 k | 227.0 k | 200.0 k | 141.0 k | 201.0 k | 270.0 k | 260.0 k |
| Pre-tax income | 2.6 m | 4.6 m | 1.6 m | 6.2 m | 2.9 m | 5.3 m | 3.5 m | 3.4 m |
| Income tax | 546.0 k | 1.3 m | 402.0 k | 1.5 m | 741.0 k | 1.4 m | 668.0 k | 331.0 k |
| Net income | 2.0 m | 3.3 m | 1.2 m | 4.7 m | 2.2 m | 3.9 m | 2.9 m | 3.0 m |
| Diluted EPS | 0.61 | 0.98 | 0.36 ≈ | 1.40 | 0.66 | 1.20 | 0.85 ≈ | 0.92 |
| Operating cash flow | -4.2 m ≈ | 754.0 k ≈ | -173.0 k | 2.3 m | 3.6 m ≈ | 1.6 m ≈ | -273.0 k | 6.5 m |
| Capex | 542.0 k ≈ | 180.0 k ≈ | 93.0 k | 98.0 k | 70.0 k ≈ | 112.0 k ≈ | 203.0 k | 346.0 k |
| Share repurchases | 1.2 m ≈ | 0 ≈ | 0 | — | — | 601.0 k ≈ | 600.0 k | 600.0 k |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 50 percentile of its own 40-quarter history (min 4.3, median 15.5, max 66.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 27.2 m | 34.8 m | 38.0 m | 42.0 m | 46.1 m | 53.8 m | 66.6 m | 77.5 m |
| Revenue YoY | +21.0% | +28.2% | +9.2% | +10.5% | +9.6% | +16.8% | +23.7% | +16.5% |
| Net income | 4.1 m | 6.1 m | 6.2 m | 4.6 m | 7.1 m | 2.1 m | 9.0 m | 13.7 m |
| Net income YoY | +155.9% | +47.3% | +0.9% | −25.9% | +54.7% | −69.9% | +322.1% | +52.2% |
| Diluted EPS | 0.97 | 1.50 | 1.57 | 1.21 | 1.95 | 0.60 | 2.67 | 4.12 |
| Diluted EPS YoY | +162.2% | +54.6% | +4.7% | −22.9% | +61.2% | −69.2% | +345.0% | +54.3% |
| net % | 15.3% | 17.5% | 16.2% | 10.9% | 15.3% | 4.0% | 13.5% | 17.6% |
| Free cash flow | 1.9 m | 4.4 m | -3.8 m | -2.5 m | unavailable | unavailable | -2.9 m | 6.8 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2026 · 30 Jun 2026
- Cash
- 8.2 m USD
- Financial debt
- 17.5 m USD
- Net debt
- 9.3 m USD
- Equity
- 47.6 m USD
- Total assets
- 74.5 m USD
- Debt / equity
- 0.37x
- Current ratio
- 4.10x
- ROE
- 32.4%
- ROA
- 20.1%
- FCF margin
- 8.7%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 38.0 m | 42.0 m | 46.1 m | 53.8 m | 66.6 m | 77.5 m | SEC (XBRL)· 03 Sept 2026verified |
| Cost of revenue | 24.5 m | 28.9 m | 33.3 m | 39.3 m | 47.1 m | 53.2 m | SEC (XBRL)· 03 Sept 2026verified |
| Gross profit | 13.6 m | 13.1 m | 12.7 m | 14.6 m | 19.5 m | 24.3 m | SEC (XBRL)· 03 Sept 2026verified |
| Research & development | 4.4 m | 3.0 m | 2.8 m | 3.2 m | 3.6 m | 3.3 m | SEC (XBRL)· 03 Sept 2026verified |
| SG&A | — | — | — | — | 5.2 m | 8.0 m | SEC (XBRL)· 03 Sept 2026verified |
| Operating income | 4.5 m | 5.1 m | 5.8 m | 7.2 m | 10.7 m | 13.0 m | SEC (XBRL)· 03 Sept 2026verified |
| Depreciation & amortisation | 686.0 k | 726.0 k | 857.0 k | 1.2 m | 1.2 m | 1.4 m | SEC (XBRL)· 03 Sept 2026verified |
| EBITDA | 5.2 m ≈ | 5.8 m ≈ | 6.6 m ≈ | 8.3 m ≈ | 11.9 m ≈ | 14.4 m ≈ | SEC (XBRL)· 03 Sept 2026derived |
| Interest expense | 352.0 k | 464.0 k | 533.0 k | 558.0 k | 829.0 k | 812.0 k | SEC (XBRL)· 03 Sept 2026verified |
| Pre-tax income | 7.6 m | 5.7 m | 9.4 m | 2.6 m | 12.1 m | 18.0 m | SEC (XBRL)· 03 Sept 2026verified |
| Income tax | 1.4 m | 1.1 m | 2.4 m | 507.0 k | 3.1 m | 4.4 m | SEC (XBRL)· 03 Sept 2026verified |
| Net income | 6.2 m | 4.6 m | 7.1 m | 2.1 m | 9.0 m | 13.7 m | SEC (XBRL)· 03 Sept 2026verified |
| Diluted EPS | 1.57 | 1.21 | 1.95 | 0.60 | 2.67 | 4.12 | SEC (XBRL)· 03 Sept 2026verified |
| Weighted average diluted shares | 3.9 m | 3.8 m | 3.6 m | 3.6 m | 3.4 m | 3.3 m | SEC (XBRL)· 03 Sept 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 3.7 m | 849.0 k | 2.9 m | 2.6 m | 419.0 k | 8.2 m | SEC (XBRL)· 03 Sept 2026verified |
| Receivables | 10.9 m | 15.4 m | 10.0 m | 13.9 m | 16.4 m | 21.2 m | SEC (XBRL)· 03 Sept 2026verified |
| Inventories | 8.4 m | 12.7 m | 16.2 m | 15.3 m | 22.2 m | 21.5 m | SEC (XBRL)· 03 Sept 2026verified |
| Current assets | 25.0 m | 31.2 m | 31.0 m | 36.6 m | 47.3 m | 53.2 m | SEC (XBRL)· 03 Sept 2026verified |
| Property, plant & equipment, net | 3.8 m | 4.8 m | 5.1 m | 5.0 m | 5.2 m | 5.4 m | SEC (XBRL)· 03 Sept 2026verified |
| Goodwill | — | — | — | — | — | 6.5 m | SEC (XBRL)· 03 Sept 2026verified |
| Intangibles (excl. goodwill) | 186.0 k | 118.0 k | 81.0 k | 54.0 k | 26.0 k | 686.0 k | SEC (XBRL)· 03 Sept 2026verified |
| Total assets | 40.3 m | 49.1 m | 51.8 m | 52.5 m | 61.2 m | 74.5 m | SEC (XBRL)· 03 Sept 2026verified |
| Accounts payable | 2.3 m | 3.8 m | 2.3 m | 4.5 m | 4.6 m | 4.3 m | SEC (XBRL)· 03 Sept 2026verified |
| Short-term debt | 1.2 m | — | — | — | — | — | SEC (XBRL)· 15 Nov 2021verified |
| Long-term debt | 12.8 m | 13.6 m | 12.8 m | 12.0 m | 15.4 m | 17.5 m | SEC (XBRL)· 03 Sept 2026verified |
| Current liabilities | 6.3 m | 11.4 m | 9.7 m | 12.9 m | 14.6 m | 13.0 m | SEC (XBRL)· 03 Sept 2026verified |
| Total liabilities | 20.2 m | 23.7 m | 20.2 m | 21.6 m | 24.6 m | 26.9 m | SEC (XBRL)· 03 Sept 2026verified |
| Equity | 21.1 m † | 25.4 m † | 31.6 m † | 30.9 m † | 36.6 m † | 47.6 m † | SEC (XBRL)· 03 Sept 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | -2.1 m | -847.0 k | 5.5 m | 6.2 m | -1.7 m | 7.2 m | SEC (XBRL)· 03 Sept 2026verified |
| Capex | 1.8 m | 1.6 m | — | — | 1.2 m | 483.0 k | SEC (XBRL)· 03 Sept 2026verified |
| Free cash flow | -3.8 m ≈ | -2.5 m ≈ | — | — | -2.9 m ≈ | 6.8 m ≈ | SEC (XBRL)· 03 Sept 2026derived |
| Investing cash flow | -3.7 m | -1.2 m | -885.0 k | -2.2 m | -238.0 k | 3.9 m | SEC (XBRL)· 03 Sept 2026verified |
| Financing cash flow | 3.1 m | -790.0 k | -2.5 m | -4.3 m | -292.0 k | -3.4 m | SEC (XBRL)· 03 Sept 2026verified |
| Share repurchases | 5.5 m | 1.6 m | 1.5 m | 3.5 m | 3.5 m | 3.4 m | SEC (XBRL)· 03 Sept 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 84 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
02 Nov 2026Source: olivLaw, closing series
Market cap: 184.5 m USD
Key indicators
Coverage and freshness
Score by group
- Returns26
- Balance sheet100
- Valuation81
- Quality82
- Growth100
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 73.79 – 119.23 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
- Peers: EV/EBITDAunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
- Peers: P/E73.79 – 119.23 (Mid 87.27)12 companies used · median multiple 24.0x · quartiles 20.3x – 32.8xBSX, DXCM, EMBC, ICCM, INFU, LMAT, MMM, NEPH, RMD, SYK, UTMD, WST
- Dividend discount (DDM)unavailable · the company pays no dividend: a dividend model needs an explicit initiation assumption
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 84/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | unavailable | unavailable | — |
| Net margin · Quality | 15.1% | 80 (vs peers) | 10% |
| FCF conversion · Quality | 88.9% | 84 (on a fixed band) | 10% |
| Revenue CAGR 3Y · Growth | 18.9% | 100 (on a fixed band) | 13% |
| EPS CAGR 3Y · Growth | 28.3% | 100 (on a fixed band) | 13% |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 15.4x | 100 (on a fixed band) | 10% |
| Current ratio · Balance sheet | 4.2x | 100 (on a fixed band) | 6% |
| P/E (TTM) · Valuation | 15.9x | 88 (vs peers) | 16% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 5.8% | 72 (on a fixed band) | 13% |
| Shareholder yield (distributions) · Returns | 1.8% | 26 (on a fixed band) | 10% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet100/100 · 2/3 factors with a value
- Growth100/100 · 2/2 factors with a value
- Quality82/100 · 2/3 factors with a value
- Returns· partial26/100 · 1/2 factors with a value
- Valuation81/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
PRO-DEX, INC. (PDEX). Latest full fiscal year: 2026; data up to 2026-09-30.
Figures computed from the financial statements: revenue 77.5 m USD in 2026; YoY growth 16.5%; net margin 15.1%; ROE 26.5%.
The estimated value range is 73.79–119.23 USD per share (median of 1 methods, agreement: single method); assumptions are illustrative. Against the central value of 87.27 USD, the price of 57.65 USD leaves a potential of 51.4% (value / price − 1) and a margin of safety of 33.9% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 84/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Net margin: 15.1%
- FCF conversion: 88.9%
- Revenue CAGR 3Y: 18.9%
- EPS CAGR 3Y: 28.3%
- Interest coverage: 15.4x
- Current ratio: 4.2x
- P/E (TTM): 15.9x
- FCF yield: 5.8%
- The price is below the estimated value range
What contradicts it
- Shareholder yield (distributions): 1.8%
Not assessed (insufficient data or a ratio without meaning): ROIC, Net debt / EBITDA, EV/EBITDA, Payout ratio (FCF).
Versus the vertical median
Surgical & Medical Instruments & Apparatus (SIC 3841) · same industry (4-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| SYKStryker Corp | 116.8 bn | 32.7 | 16.0% | 13.8% | +11.2% | −17% / +4% |
| MMM3m Company | 92.2 bn | 26.6 | 80.8% | 14.0% | +1.5% | +4% / +115% |
| BSXBoston Scientific Corporation | 64.2 bn | 18.8 | 14.3% | 16.6% | +19.9% | −56% / −21% |
| BDXBecton, Dickinson And Company | 54.1 bn | 60.0 | 3.8% | 4.0% | +8.2% | +30% / +7% |
| RMDResMed Inc. | 32.8 bn | 21.2 | 26.4% | 27.8% | +9.9% | −9% / +48% |
| DXCMDexcom, Inc. | 31.6 bn | 33.4 | 37.7% | 19.4% | +15.6% | +34% / −27% |
| WSTWest Pharmaceutical Services, Inc. | 28.4 bn | 45.8 | 21.2% | 18.8% | +6.3% | +47% / +16% |
| PENPenumbra, Inc | 12.7 bn | 80.9 | 10.7% | 10.1% | +17.5% | +10% / +45% |
| TFXTeleflex Incorporated | 6.0 bn | — | -28.9% | -45.8% | +17.2% | +23% / −38% |
| HAEHaemonetics Corporation | 5.5 bn | 58.7 | 11.2% | 7.1% | −2.0% | +48% / +49% |
| MMEDMiniMed Group, Inc. | 5.3 bn | — | -8.6% | -9.6% | +14.3% | unavailable / unavailable |
| HTFLHeartflow, Inc. | 4.7 bn | — | — | -55.8% | +39.9% | +69% / unavailable |
| PLSEPulse Biosciences, Inc. | 3.8 bn | — | -78.5% | -6,755.8% | unavailable | +286% / +486% |
| ATRCAtriCure, Inc. | 3.0 bn | 289.8 | 2.2% | 1.9% | +14.9% | +66% / +69% |
| LMATLemaitre Vascular, Inc. | 1.9 bn | 28.5 | 16.8% | 25.0% | +13.5% | −2% / +54% |
| ATECAlphatec Holdings, Inc. | 1.1 bn | — | -1,888.0% | -10.3% | +25.0% | −68% / −38% |
| PRCTPROCEPT BioRobotics Corporation | 1.1 bn | — | -30.2% | -32.5% | +37.2% | −39% / −48% |
| DCTHDelcath Systems, Inc. | 495.8 m | 1,152.7 | 0.5% | 0.6% | +129.1% | +47% / +420% |
| SSIISs Innovations International, Inc. | 462.9 m | — | -26.1% | -23.7% | +105.7% | −66% / unavailable |
| EMBCEmbecta Corp. | 350.7 m | 4.2 | — | 8.6% | −3.8% | −51% / −66% |
| CLPTClearPoint Neuro, Inc. | 318.9 m | — | -167.5% | -79.4% | +17.8% | −31% / +73% |
| INFUInfusystem Holdings, Inc | 275.7 m | 34.0 | 15.0% | 6.0% | +6.4% | +49% / +38% |
| ANIKAnika Therapeutics, Inc. | 259.8 m | — | -2.7% | -3.1% | −5.9% | +96% / −11% |
| UTMDUtah Medical Products, Inc. | 224.6 m | 21.5 | 8.8% | 29.0% | −5.8% | +25% / −16% |
| TLSITriSalus Life Sciences, Inc. | 223.5 m | — | — | -62.6% | +53.4% | −47% / −9% |
1- and 3-year price returns: for PDEX from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 39.02 Total return -32% · Per year -32% | 68.66 Total return 19% · Per year 19% | 103.00 Total return 79% · Per year 79% |
| 3 years | 46.28 Total return -20% · Per year -7% | 90.81 Total return 58% · Per year 16% | 148.32 Total return 157% · Per year 37% |
| 5 years | 54.90 Total return -5% · Per year -1% | 120.09 Total return 108% · Per year 16% | 213.57 Total return 270% · Per year 30% |
- Exit P/E± 22.70
- Net margin± 15.89
- Annual revenue growth± 11.85
- Annual dilution± 1.34
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 03 Sept 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
In brief
Pro-Dex designs and manufactures battery-powered and electric surgical drivers and shavers used mainly in orthopedic, thoracic and craniomaxillofacial procedures, sold mostly through medical device distributors. In fiscal 2026 net sales rose 16% to 77.5 million USD, and the company expanded through the APM acquisition, which makes parts for aerospace and defense.
SWOT
Strengths
- The company has patented torque-limiting technology and a surgical product portfolio that reached record sales in fiscal 2026. Gross margins improved and net income rose sharply from the prior year 12.
- The contract extension with the largest customer through 2028 gives visibility over a major part of revenue. The APM acquisition adds machining capacity and certifications for aerospace and defense 1.
- The company holds consolidated assets and growing shareholders' equity, reflected in positive operating results 2.
Weaknesses
- Dependence on a single customer, which accounted for most sales, exposes the company to major losses if that relationship changes 1.
- Repair revenue fell sharply and is sensitive to the largest customer's transition to new products 1.
- Gains on equity investments contributed much of net income, but they are volatile and do not reflect operating performance 2.
Opportunities
- If new products gain acceptance, the company could expand sales to other customers in orthopedic, CMF and thoracic markets 1.
- Growth in aerospace and defense through APM could reduce dependence on the medical sector if integration succeeds 12.
- Acquisitions of other businesses are cited as a route to more sales, and management is pursuing new product proposals 1.
Threats
- Price pressure from larger competitors and from customers that can develop products in-house could reduce margins 1.
- Healthcare cost pressure from governments could lead to lower prices or lower demand for the company's products 1.
- Supplier tariffs, partly passed on to customers, could affect costs and commercial relationships 1.
Risks
- Dependence on the largest customerhigh
One customer made up most of fiscal 2026 sales, and losing it or a major reduction in its orders would have a material adverse effect on results. There is no assurance the customer will extend commitments beyond 2028 1.
- Product transition and warranty estimatesmedium
The company launched new products while warranty estimates rely on legacy products. If repair volumes or costs exceed estimates, results could be adversely affected 1.
- Competition and technological changemedium
The market is intensely competitive and changes quickly. If the company cannot develop new products in time, its competitive position could be affected 1.
- APM integration and regulatory exposuremedium
The APM acquisition brings added administrative costs and ITAR and export obligations. A change in these regulations could have an adverse effect on operations 12.
- Liquidity and debt servicelow
Servicing debt requires sufficient cash flow, and refinancing is not assured on favorable terms. Investment gains are volatile and cannot reliably offset an operating decline 12.
Investment thesis
What would need to be true (bull case)
- If the next generation product and the extended contract sustain volumes, revenue and margins could remain near fiscal 2026 levels 12.
- If APM integrates well, the company could diversify revenue into aerospace and defense and reduce reliance on a single customer 12.
- Profitability improved significantly, and if this trend holds, the ability to fund growth could increase 2.
What would break the thesis
- Extreme dependence on one customer means any change in that relationship could seriously affect revenue 1.
- Backlog fell considerably and repairs continue to decline; if new orders do not offset this, growth could slow 1.
- Part of net income came from volatile investment gains, making the result less predictable than operating earnings 2.
What to watch
- Trend in backlog and new ordersQ1 2027
- Repair volumes of the next generation orthopedic handpiece2027
- APM integration and its contribution to revenue and marginsnext 10-K
- Possible extension of the largest customer's commitments beyond 20282027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 03 Sept 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
The business
Founded in Colorado in 1994 and headquartered in Irvine, California, the company focuses on designing, developing and manufacturing multi-function surgical drivers and shavers with patented adaptive torque-limiting technology. Most revenue comes from medical devices made for original equipment manufacturers, machined in Irvine and assembled in Tustin. Since February 2026, through its APM subsidiary in Costa Mesa, it also makes precision parts for aerospace and defense, including as a Prime Contractor for the U.S. Government 1.
Revenue is concentrated. In fiscal 2026 the top three customers made up 92% of sales and the largest one alone 78% 1. Repair revenue fell 33% as the main customer moved to its next generation handpiece, showing how a single product transition can shift the revenue mix quickly 1.
The company reports one operating segment, and the CEO allocates resources and reviews performance on a consolidated basis 1. Relevant items include the supply agreement with the largest customer extended through calendar 2028 and the APM acquisition, which also gives the company a second machine shop 1.
Segments
Medical devices
Medical devices are the core segment, with 62.1 million USD of sales in fiscal 2026, or 80% of the total. Growth of 30% over the prior year came mainly from the launch of the next generation orthopedic handpiece at the largest customer, and the segment spans orthopedic, CMF and thoracic products 1.
Repairs, NRE and industrial
Repairs reached 12.5 million USD in fiscal 2026, down 33%, while NRE and prototype services rose 136%. Industrial and scientific sales grew after APM was consolidated. Repairs may keep declining in future periods if the largest customer's transition continues 1.
Aerospace and defense (APM)
Through APM the company produces precision parts and assemblies for aerospace and defense, holding AS9100D, ISO 9001 and ITAR registrations. Its contribution in fiscal 2026, from the February acquisition date, was 718 thousand USD, a small part of the business 2.
Market context
The market for powered surgical instruments is intensely competitive, with larger companies that have more recognition and resources. Pro-Dex also competes with its customers' internal development groups, and price pressure could erode market share 1. Demand in orthopedic and CMF surgery depends on decisions by major customers and on the pace of new product launches.
Healthcare costs face ongoing pressure from governments, which could reduce prices or demand for the company's products. The aerospace and defense business that APM serves is subject to different export and regulatory requirements, which can change operating conditions 1.
Trends
- Next generation orthopedic handpiece launchtailwind
Sales growth in fiscal 2026 came largely from the largest customer's next generation handpiece, and the agreement extended through 2028 supports the expected volumes 1. If volumes stay at the expected level, this trend could support revenue in the coming years.
- Decline of legacy handpiece repairsheadwind
Repairs of the legacy product fell 33%, and the company expects further declines as the customer moves to the next generation. Billable repairs of the new generation could start in fiscal 2027, but volumes are not yet known 1.
- APM acquisition and diversificationmixed
Entry into aerospace and defense through APM partly diversifies the revenue base but adds integration and administrative costs. If integration succeeds, this diversification could reduce reliance on a single customer 12.
Competitive position
Pro-Dex competes with large medical device companies that have greater brand recognition and financial and development resources, and with customers' internal development groups that can build products themselves. The analyzed sources do not name specific competitors, so the list below stays limited to what the company describes generically 1.
The company's edge rests on patented torque-limiting technology and proprietary sealing solutions, which have been well received in CMF and thoracic markets. The company acknowledges there is no assurance its products will achieve broad acceptance or compete successfully with others 1.
- Large medical device manufacturers
Companies with greater name recognition and resources, described generically by management as competitors in all of the company's markets 1.
- Customers' internal development groups
Customers that can develop and manufacture in-house, competing with the company's outsourced services 1.
- Other surgical device suppliers
Companies in the same industry that could introduce new products or technologies that replace current solutions 1.
- Aerospace and defense precision parts makers
APM's competitors in precision machining for aerospace and defense, not named in the sources 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
No news in our archive over the last 180 days.
SEC filings
- Current report30 Oct 2026Material agreement · Financial statements and exhibits
- Current report29 Oct 2026Results of operations · Financial statements and exhibits
- Quarterly report29 Oct 2026
- Proxy statement06 Oct 2026
- Current report18 Sept 2026Material agreement · Financial statements and exhibits
- Current report03 Sept 2026Results of operations · Financial statements and exhibits
- Annual report03 Sept 2026
- Current report28 Aug 2026Departure or appointment of officers · Financial statements and exhibits
- Current report17 Jun 2026Regulation FD disclosure · Financial statements and exhibits
- Current report30 Apr 2026Results of operations · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2026-06-30 · SEC / Pro-Dex, Inc. · 03 Sept 2026
- [2] Form 8-K, results release (exhibit 99.1) · SEC / Pro-Dex, Inc. · 03 Sept 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.