Compumedics Limited

CMP Details

FY21 Financial Update: Compumedics Limited (ASX: CMP) is engaged in the research, development, and commercialisation of medical devices. As per a recent update, the company has announced its FY21 performance and delivered revenues of $35.6 million, compared to $35.1 million in FY20.

• It expects improved positive EBITDA in FY21 on the back of revenue stability and prudent cost measures.
• Cash position improved to $6.1 million as of 30 June 2021, compared to $5.6 million as of 31 December 2020. The borrowings stood at $4.2 million as of 30 June 2021.

Trend in Revenue (Source: Analysis by Kalkine Group)

Key Risks: The company's operations have been impacted due to the onset of the COVID-19 pandemic, and the uncertainty in the business conditions still prevails.

Outlook: The company continues to pursue additional sales opportunities for MEG, which have been impacted due to the onset of the COVID-19 pandemic. It will also look to progress on the installation of the dual-helmet Dewar at Barrow Neurological Institute.

Technical Overview:

On the daily chart, CMP stock price witnessed a sharp rally from the low of $0.37 and recently made of high of $0.48 level on 13 August 2021. Prices are continuously sustaining below the horizontal trend line resistance zone at $0.515 level. The momentum oscillator RSI (14-Period) trading in the overbought zone (~70.57 levels), indicating a possibility of a correction in the prices from the current levels. An important support level for the stock, is placed at $0.41, while key resistance level is placed at $0.515.

Stock Recommendation: As per ASX, the stock of CMP is trading above its average 52-weeks’ levels of $0.355-$0.580. The stock of CMP gave positive returns of ~16.66% in the past one month and positive returns of ~10.97% in the past three months. Considering the current trading levels, recent rally in the stock price, technical analysis, impact of COVID-19 and the key risks associated with the business, we suggest investors to book profit and give a 'Sell' rating on the stock at the market price of $0.480, as on 13 August 2021, 11:40 AM (GMT+10), Sydney, Eastern Australia.  

CMP Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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