Shares of Nano-X Imaging (NNOX) are under pressure on Tuesday after Andrew Left's Citron Research claimed in a new short report that the shares of the newly public company are heading to zero. "We see right through it as a stock promotion that is actually insulting to anyone who spends 10 minutes to read the prospectus. This stock is heading to $0 as the company's recent fair value opinion on their technology is $0.14 a share," the short-seller argued in the report. Meanwhile, Cantor Fitzgerald analyst Steven Halper initiated coverage of the stock with an Overweight rating, while his peer at Oppenheimer started Nano-X Imaging with a Perform rating. 

'SHARES HEADING TO ZERO': In a new short report, Andrew Left's Citron Research claimed that shares of Nano-X Imaging are heading to zero. "We see right through it as a stock promotion that is actually insulting to anyone who spends 10 minutes to read the prospectus. This stock is heading to $0 as the company's recent fair value opinion on their technology is $0.14 a share." Nano-X "has never published any data showing their machine's images compared to images from a standard CT scanner," the firm, who takes short positions in the names it writes about, said in a report posted on its website. "There is not one scientific paper or that would back up any of these claims. As a matter of fact, we have not even seen proof of the product and have only seen a mockup drawing of what this machine is supposed to look like," Citron wrote.

GROWTH POTENTIAL: Cantor Fitzgerald analyst Steven Halper initiated coverage of Nano-X Imaging with an Overweight rating and $70 price target. Noting that Nano-X is developing a proprietary digital X-ray source and a scanner known as the Nanox.ARC, the analyst told investors that he believes the company's technology will allow it to bring imaging services to under-developed markets with a much lower price point compared to traditional technologies. Further, Halper estimates the company will install 15,000 Nanox.ARC units by 2024. At about $900M of revenue in 2026, the analyst expects operating margin will reach 65% and free cash flow of about $225M. He also believes the long-term, risk adjusted growth potential is not reflected in the shares' current valuation.

Meanwhile, Berenberg analyst Ravi Misra initiated coverage of Nano-X Imaging with a Buy rating and $65 price target.

EXECUTION RISK: Oppenheimer analyst Suraj Kalia also started coverage of Nano-X Imaging with a Perform rating and no price target. The analyst acknowledged that the company's efforts in field-emission flat-panel display technology "could potentially disrupt the X-ray imaging space" by mitigating issues with traditional heat-based X-ray filament technology, potentially providing better resolution at lower radiation, and introducing an MSaaS - Medical Software as a Service - subscription model in lieu of high up-front cap-ex. However, Kalia recognized the inherent execution risk in the early-stage company. While exciting, Nano-X 's technology has yet to be validated in real-world settings, he added.

PRICE ACTION: In late morning trading, shares of Nano-X have dropped almost 27% to $36.03.