Shares of Nanox, an Israeli company that develops low-cost digital X-ray machines, rode a roller coaster on Wall Street over the past week. Last Thursday, the stock plunged 50%; on Friday, it jumped 25%; and on Monday, when trading resumed, it rose another 20%. But even those sharp swings pale in comparison to the broader picture: Since its IPO, the company has erased more than 90% of its value.
At its peak, in late 2020 and early 2021, Nanox’s value soared to $3.5 billion, driven by expectations surrounding its innovative X-ray and CT technology, which at the time was seen as a major promise addressing a real market need. At its low point, after the company published its financial reports last week, which included a going concern warning and no revenue forecast for the future, along with an announcement that it would not meet its previous revenue guidance and a quarterly loss of $14.3 million, compared with $13.2 million in the corresponding quarter last year, its value fell to just $60 million. The company ended all of 2025 with a loss of $75 million. Today, its market capitalization stands at about $76 million.
What is behind the upheaval at the company? Nanox was founded by the late Ran Poliakine and is now led by Erez Meltzer, former CEO of Netafim and Africa Israel. The company entered the market with a major promise in the X-ray equipment field, but ran into the reality that it takes a long time to change a conservative market, deploy new devices, overcome regulatory hurdles and change the way physicians perform imaging. All of these eventually led the company to cancel its previous forecasts.
Nanox presented a digital version of X-ray machines at a lower cost and with reduced radiation. The main technological shift was replacing the traditional X-ray tube, which works by heating a filament to thousands of degrees, with a digital silicon chip capable of producing X-rays using low electrical voltage. The company’s imaging system connects to the cloud and incorporates artificial intelligence tools, without the need for heating or heavy and expensive cooling mechanisms found in regular CT scanners.
Nanox’s machines are compact and significantly cheaper. While a regular scanner costs millions of dollars, Nanox’s scanner weighs up to 350 kilograms, its production cost was estimated at only about $10,000 and it operates through a standard electrical connection, without the need for industrial power infrastructure. In doing so, the company addressed a real need among medical institutions, hospitals and clinics that suffer from a shortage of imaging devices because of their high cost.
Not enough cash in the bank
The central problem was execution and mistaken management decisions. Chief among them was the business model through which the company entered the market: supplying devices to customers with no upfront payment while charging only for each scan actually performed. The problem was that until revenue actually arrived, the company had to finance all the costs of producing the machines itself, burning through its cash at a rapid pace.
At the same time, the company experienced longer-than-expected delays in deploying the machines among its customers, partly because of regulatory difficulties in various countries and the time needed to build suitable infrastructure and prepare the market. In addition, the company built a plant in South Korea to produce the digital core of its machines. The plant caused heavy losses because of excess production capacity and high operating costs, and will now likely be closed or sold in order to cut losses. The company is also facing several class-action lawsuits from investors alleging that they were misled about its financial condition and the pace of cash burn at the South Korean plant.
What likely prompted investors to return and buy the company’s stock? The very low share price, which reflects relatively limited risk compared with the chance that the company’s technology will ultimately prevail. In addition, during an investor call held by Meltzer on the day the reports were published, the company announced plans to raise capital as early as the coming month. If successful, the financing would eliminate the going concern warning. The company currently has about $40 million in cash, and investors are concerned that at its current cash burn rate, that amount will not be enough for the next 12 months.
The company also said it is changing its operating model, moving from selling scans only to selling the machines themselves. Investors were also shown an improvement in the pace of system deployment and the signing of distribution agreements that could lead to the sale of hundreds of machines in the coming years.
The investors’ dilemma
Meltzer said that "the second quarter will be better than the first quarter," adding that only in the third and fourth quarters, after the training of new distributors is completed, will it be possible to see a significant acceleration in the company’s revenue. Cantor Fitzgerald analyst Ross Osborn set a $5 price target for the stock, writing that there are leading indicators strengthening optimism that the company will be able to build a sufficient level of certainty regarding its revenue in the near term.
Nanox CEO Erez Meltzer
(Photo: Amit Shaal)
According to him, the commercial model in the United States has been reorganized to rely on partnerships in the target market, such as the company’s relationship with RadNet, the largest network of imaging centers in the United States, which has already installed one system and is considering deploying additional systems. The company also intends to approach additional sectors, including the prison service, private medical providers and insurance companies.
At the same time, the company is undergoing efficiency measures, including reducing activity in South Korea and cutting 14% of its workforce. The layoffs began this year in Israel and are expected to help improve operating expenses. According to the company, the growth potential of the new initiative is not fully reflected in the current share price. Meltzer himself expressed optimism, saying that leading a change in the standard of care in medical imaging is a long-term mission.
"We believe that the adjustments we have made and the lessons we have learned will allow us to allocate resources better and position the company to realize its potential. We expect to announce additional partnerships soon that will expand our market footprint," he said.
People close to the company point to precedents in the industry: Other technology companies went public, fell to very low share prices and only later grew their sales and soared in value. For example, Nova shares traded for about a decade at around $2 per share, while today the company trades at a valuation of about $12 billion. A similar trend can be seen at Camtek and Butterfly. Now, it seems, Nanox investors face the same dilemma: bet on the potential for a breakthrough or give up and abandon the stock.