Here’s Why Zynex (ZYXI) Fell in Q1

Soumya Eswaran

Fri, May 23, 2025, 8:58 AM 3 min read

Rewey Asset Management, an investment management company, released its “RAM Smid Composite” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The composite declined 6.97% in Q1 2025, trailing a 5.83% decline for the benchmark Russell 2500 Value Total Return Index. Larger-cap stocks outperformed smaller ones in 1Q25, with the Russell 3000 TR value up 1.64% and the Russell 2000 TR value down 7.74%, while the RAM Smid composite is biased towards smaller-cap stocks. The significant market theme in Q1 2025 was the uncertainty surrounding the potential negative economic effects of Trump's tariffs. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Rewey Asset Management highlighted stocks such as Zynex, Inc. (NASDAQ:ZYXI). Zynex, Inc. (NASDAQ:ZYXI) is a medical device manufacturer. The one-month return of Zynex, Inc. (NASDAQ:ZYXI) was -6.43%, and its shares lost 78.56% of their value over the last 52 weeks. On May 22, 2025, Zynex, Inc. (NASDAQ:ZYXI) stock closed at $2.30 per share with a market capitalization of $68.189 million.

Rewey Asset Management stated the following regarding Zynex, Inc. (NASDAQ:ZYXI) in its Q1 2025 investor letter:

"Zynex, Inc. (NASDAQ:ZYXI) was our worst performer in the quarter, as the company announced that its top insurance payor was pausing reimbursement while it reviewed the company’s shipping practices for consumable supplies. The company continues to ship consumables as requested during the review and has stated they are compliant with the relationship post an audit 2-years ago. While we did trim our position on this news, the leading pillar of our investment case, the introduction of the company’s NiCO pulse laser oximeter in late 2025, remains in-tact. This pulse oximeter uses a laser to measure blood oxygen levels during surgery and is more accurate than current light-based estimated readings which are obstructed by pigment levels in skin. Leading reviews of the NiCO device have been positive, and we think it could become the standard of care."

A close-up view of medical devices, electrical stimulation electrodes, and batteries.

Zynex, Inc. (NASDAQ:ZYXI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Zynex, Inc. (NASDAQ:ZYXI) at the end of the fourth quarter compared to 10 in the third quarter. In Q1 2025, Zynex, Inc. (NASDAQ:ZYXI) reported net revenue of $26.6 million compared to $46.5 million in Q1 2024. While we acknowledge the potential of Zynex, Inc. (NASDAQ:ZYXI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.