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Highlights

  • On Wednesday, PNV shares closed 2.142% higher at AUD 1.430, taking its one-week return to 7.12%
  • However, in the last one month, the stock has witnessed a correction of 12.80%
  • The healthcare stock has risen 134% in the last five years through 24 May 2023.

ASX-listed healthcare company PolyNovo Limited (ASX: PNV), which develops and distributes medical devices in multiple countries, including the U.S. and the U.K., has delivered impressive returns over the five-year time frame despite medium-term weakness.

The healthcare stock has risen 134% in the last five years through 24 May 2023, despite falling nearly 30% on a year-to-date (YTD) basis.

PNV Financials

The company's stellar revenue growth has underpinned its stock performance. Its revenue has grown from AUD 5.99 million in FY18 to AUD 41.44 million in FY22, a CAGR of nearly 62%. Similarly, for the six months ended 31 December 2022, the company reported a revenue of AUD 29.22 million, 62.2% more than 1HFY22 revenue of AUD 18.2 million.

PNV's sales growth in 1HFY23 was driven by increased sales of its flagship biodegradable temporizing matrix (BTM) products, which registered 67.5% annual sales growth in 1HFY23. The U.S. made the largest contribution in terms of dollar revenue.

However, the company is yet to turn profitable on a net basis annually. In 1HFY23, the BTM product manufacturer reported a net loss of AUD 3.82 million compared to a net profit of AUD 1.62 million in 1HFy22. But that is common for most of the growth companies that launch new products and try to build a solid long-term customer base.

Its gross margins have been consistently above 90%, much better than the industry median of 64.2% as per data available on Refinitiv. Also, the company has managed to keep lower despite accumulated losses.

So far as growth plans are concerned, PNV plans to increase its team size in the current fiscal year and continue to reinvest cash to increase revenue and industry share in FY23. The company expects a significant expansion of sales of BTM in the U.S., Australia, and New Zealand.

PNV Stock Price Performance

On Wednesday, PNV shares closed 2.142% higher at AUD 1.430, taking its one-week return to 7.12%. However, in the last one month, the stock has witnessed a correction of 12.80%. On 7 February this year, PNV made a 52-week high of AUD 2.710, and its 52-week low of AUD 1.110 was seen on 7 June 2022.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, is 24 May 2023. The reference data in this report has been partly sourced from REFINITIV.