Investors May Worry About Pro-Dex's (NASDAQ:PDEX) Capital Returns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 13 2025
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Source: Yahoo Finance
Pro-Dex's ROCE Performance: Pro-Dex has a return on capital employed (ROCE) of 21%, which is significantly higher than the industry average of 11%, indicating strong profitability relative to its capital employed.
Trends in Capital and Revenue: Although Pro-Dex's ROCE has decreased from 27% over the past five years, both revenue and capital employed have increased, suggesting the company is investing in growth.
Investment Potential: The stock has delivered a 1.8% gain to shareholders over the last five years, prompting a recommendation for further investigation into its investment potential.
Risks and Warnings: Despite its strong returns, Pro-Dex has been flagged with two warning signs in the investment analysis, indicating potential risks for investors.
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Analyst Views on PDEX
About PDEX
Pro-Dex, Inc. specializes in the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used primarily in the orthopedic, thoracic, and maxocranial facial markets. The Company has patented adoptive torque-limiting software and sealing solutions, which appeal to its customers, primarily medical device distributors. It also manufactures and sells rotary air motors to a range of industries. The Company’s medical device products utilize designs developed by it primarily under development and supply agreements and are machined in its Irvine, California facility, and assembled in its Tustin, California facility, as are its rotary air motors. Its medical device products are sold primarily to original equipment manufacturers and its air motors are sold primarily to a range of distributors and end users. It has an approximately 25,000 square foot industrial building in Tustin, California (the Franklin Property).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pro-Dex Reports Q2 Earnings with Revenue of $1.9M
- Earnings Highlights: Pro-Dex reported a Q2 GAAP EPS of $0.66, with revenue at $1.9 million, indicating stable performance in the niche surgical tools market and reflecting its competitive position in this segment.
- Market Valuation: Pro-Dex is viewed as an attractive microcap despite customer risks, suggesting that its valuation may appeal to investors seeking undervalued opportunities in the market.
- Rating Analysis: Seeking Alpha's quantitative rating on Pro-Dex indicates a cautiously optimistic outlook from the market, highlighting investor interest in its potential growth, particularly in the surgical tools sector.
- Financial Transparency: The disclosure of financial information enhances investor confidence, as stable profitability, despite relatively low revenue, may lay the groundwork for future growth.
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Pro-Dex (PDEX) Extends Major Customer Contract by Three Years, Anticipates Revenue Growth
- Contract Extension: Pro-Dex executed a contract amendment on December 17, 2025, with its largest customer, extending the agreement through December 31, 2028, which includes minimum purchase volumes, thereby positioning the company for sustained revenue growth over the next three years.
- Sales Performance Surge: For the fiscal first quarter ending September 30, 2025, Pro-Dex reported net sales of $18.5 million, a 24% increase from $14.9 million year-over-year, primarily driven by resumed shipments to its largest customer, indicating robust market demand.
- Net Income Growth: The company's net income rose to $4.7 million, or $1.40 per diluted share, compared to $2.5 million, or $0.75 per diluted share a year earlier, reflecting the successful launch and sales of its next-generation surgical handpiece.
- Optimistic Market Outlook: Pro-Dex anticipates that the extended contract will provide stability as it continues to innovate in surgical instrumentation and expand consulting services, further solidifying its position in the medical device market.
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