Lifeward Ltd. (NASDAQ:LFWD) reported weaker-than-expected results for the fourth quarter of fiscal 2025, with both earnings and revenue coming in well below analyst forecasts. The disappointing performance sent the company’s shares down about 7% in premarket trading, with the stock changing hands near $7.
The medical technology company reported earnings per share of -$2.85 for the quarter, compared with analyst expectations of a loss of -$0.08 per share. Revenue totaled $5.08 million, also missing estimates of $8.01 million.
Revenue pressure tied to restructuring
Lifeward said revenue declined 14% year over year, reflecting the impact of restructuring efforts in its U.S. sales and distribution operations as well as inventory timing issues.
Despite the decline in sales, the company reported some operational improvement, with its GAAP gross profit margin rising to 38.2%.
For the quarter, Lifeward reported GAAP gross profit of $8.4 million, while operating expenses totaled $28.1 million, representing a 25% reduction compared with the previous year.
Market reaction
Following the earnings release, Lifeward shares fell 7.28% in premarket trading. The stock has experienced significant volatility over the past year, declining sharply from a 52-week high of $23.04.
At current levels, the company’s market capitalization stands at about $11.55 million. Over the past 12 months, the stock has lost roughly 61%, although it posted a short-term gain of about 13% in the previous week.
Strategic transformation underway
Lifeward is currently pursuing a broader transformation aimed at evolving into a diversified biomedical innovation company. The strategy includes expanding beyond its traditional focus on neurorehabilitation and pursuing new product opportunities and partnerships.
Among these initiatives is a strategic collaboration with Oramed that includes the acquisition of the oral insulin candidate ORMD-0801. The company has also entered into a partnership involving Skelable’s technology as part of its effort to diversify its product portfolio.
“Our partnership with Oramed and the acquisition of Skelable’s technology are pivotal steps in diversifying our portfolio and tapping into new markets,” said CEO Mark Grant.
Outlook and risks
Management said it remains optimistic about long-term growth prospects despite the current revenue pressures. Analyst price targets currently range from $54 to $120, implying potential upside if the company’s strategic initiatives are successfully executed.
However, several risks remain. Ongoing restructuring of the company’s sales and distribution network could continue to weigh on revenue in the near term. In addition, the success of new products and partnerships remains uncertain, while macroeconomic conditions and regulatory approvals for new medical technologies could affect the pace of commercialization.
Focus on execution
During the earnings call, analysts questioned management about the company’s plans to address the revenue shortfall and when the benefits of its strategic transformation might become visible. Executives said efforts are underway to improve the sales infrastructure and broaden reimbursement coverage, which they see as key drivers of future growth.