Nuheara Limited

NUH Details

Expansion Via Supply Agreement with HP Inc: Nuheara Limited (ASX: NUH) is mainly engaged in developing audio wearables to deliver multi-functional intelligent hearing technology that enhances user's hearing and enables cable-free connection to smart devices. The Company's IQbuds is an audio wearable (hearable) device. On 29 December 2020, the company has announced about signing a supply agreement with HP Inc. Under the agreement, NUH will be manufacturing True Wireless Earbud with a charging case for HP Inc. Nuheara will act as a co-brand along with the product manufactured for HP Inc.

Financial Highlights for 1HFY21: NUH has reported a growth in revenues in 1HFY21 to $6.9mn as compared with $1.36 mn in 1HFY20 on the back of significant sales growth of its recently launched product IQbuds Max in collaboration with their OEM partner, HP Inc. The company has significantly reduced its losses in 1HFY21 to $0.84mn from $5.72mn in 1HFY20. The company has turned into EBITDA positive in 1HFY21 to $1.48mn from EBITDA loss of $3.62mn in 1HFY20.

Revenue Growth in 1HFY21 (Source: Company Reports)

Acquired USFDA Registration: NUH has acquired US FDA registration and medical device listing for a hearing aid IQbuds Pro as reported on 9 March 2021. The company can now sell their products in US without any need for clinical trials or submission of 510(K) application. 

Outlook: As per the company reports, NUH is forecasting sustainable growth in 2HFY21. The company is expecting an expansion in sales channels to grow global customers and to deliver first mass production units for OEM partner, HP. Increased product awareness and consumer acceptance of DTC model continues to be the company’s revenue drivers.

Stock Recommendation: The market capitalisation of NUH stood at ~$75.80mn as on 16 March 2021. The stock of NUH has provided a return of 246% in the last nine months period. The stock is currently trading above the average 52-week price level range of $0.010-$0.066. On the technical analysis front, the stock has a support level of ~$0.034 and a resistance of ~$0.051. On a TTM basis, the stock of NUH is trading at an EV/Sales multiple of 10.5x, which is equal to the industry median (Computers, Phones & Household Electronics) of 10.5x. Further, the stock is trading at a price to book value multiple of 10.4x, higher than the industry median of 5.6x. Considering the stock’s decent performance in the last nine months, current trading level, valuation on TTM basis, and risks associated with the business, we suggest investors to wait for better entry levels and give an “Expensive” rating on the stock at the current market price of $0.045, up by 2.272% as of 16 March 2021.

NUH Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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