Nanosecond Pulse Field Ablation Advancements Will Transform Thyroid And Cardiac Care Over Time

Catalysts

About Pulse Biosciences

Pulse Biosciences develops and commercializes proprietary nanosecond pulse field ablation platforms for minimally invasive treatment of soft tissue and cardiac disorders.

What are the underlying business or industry changes driving this perspective?

• Early commercial traction of the nPulse Vybrance system in benign thyroid nodule ablation, supported by growing procedure volumes and positive physician feedback, positions the company to convert existing thyroidectomy volume and unlock a large base of watchful waiting patients, which should accelerate revenue growth and increase recurring disposable sales.
• Advancing clinical programs for the nPulse cardiac surgical clamp and nPulse 360 Catheter in atrial fibrillation, including FDA IDE approval, breakthrough designation, and expanding EU feasibility data, creates a path to entry in a high value EP and cardiac surgery market that can expand the company’s addressable revenue base and long term earnings power.
• Favorable momentum toward minimally invasive, organ sparing interventions in endocrine and cardiac care, combined with the nonthermal safety profile of nanosecond PFA, supports premium adoption and pricing compared with legacy thermal ablation and surgery, which can enhance gross margins as utilization scales.
• Growing clinical evidence through PRECISE BTN, NANOCLAMP AF, and European feasibility studies is expected to strengthen reimbursement, support guideline inclusion, and drive higher procedure adoption, improving revenue visibility and operating leverage as fixed R&D and commercial infrastructure is spread over a larger sales base.
• Strong cash position relative to current cash burn and focused deployment into pivotal and feasibility trials reduces near term financing overhang while funding value creating milestones, which can narrow the valuation discount as investors gain confidence in the company’s ability to translate clinical progress into future revenue and margin expansion.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Pulse Biosciences's revenue will grow by 601.5% annually over the next 3 years.
• Analysts are not forecasting that Pulse Biosciences will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Pulse Biosciences's profit margin will increase from -86898.8% to the average US Medical Equipment industry of 13.0% in 3 years.
• If Pulse Biosciences's profit margin were to converge on the industry average, you could expect earnings to reach $3.9 million (and earnings per share of $0.06) by about December 2028, up from $-74.7 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 492.6x on those 2028 earnings, up from -12.0x today. This future PE is greater than the current PE for the US Medical Equipment industry at 29.2x.
• Analysts expect the number of shares outstanding to grow by 0.73% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.7%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Despite encouraging early data, Pulse Biosciences’ products remain in limited launch and clinical trial phases across thyroid and cardiac indications, and any failure to demonstrate clear, durable superiority over existing thermal ablation and surgery could slow adoption and constrain long term revenue growth and gross margin expansion.
• The company is investing heavily ahead of scale, with GAAP costs and expenses of $20.5 million in the quarter against just $86,000 of revenue and rising cash use. If procedure and system sales ramp more slowly than expected, persistent high operating expenses could keep net margins deeply negative and delay a path to sustainable earnings.
• Successful commercialization depends on favorable reimbursement and clinical guideline inclusion for novel nsPFA procedures. If payers or specialty societies are slow to recognize or compensate these therapies, providers may limit use to trials and pilots, pressuring future procedure volumes, recurring disposable revenue and overall profitability.
• The cardiac opportunity in atrial fibrillation is large but also highly competitive. Prolonged IDE timelines, adverse regulatory feedback or stronger competing PFA and thermal technologies could reduce the company’s share of this secular growth market, limiting long term revenue scale and operating leverage.
• Management plans to expand sales and clinical infrastructure as trials and feasibility studies progress. If anticipated strategic partnerships in electrophysiology do not materialize or contribute meaningful support, the company may need additional dilutive financing to fund its pipeline, which would weigh on earnings per share and shareholder returns.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $22.0 for Pulse Biosciences based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be $29.7 million, earnings will come to $3.9 million, and it would be trading on a PE ratio of 492.6x, assuming you use a discount rate of 7.7%.
  
• Given the current share price of $13.27, the analyst price target of $22.0 is 39.7% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.