MedAdvisor Limited

MDR Details

Changes in Leadership: MedAdvisor Limited (ASX: MDR) is a MedTech company which provides a world-class medication management platform that empowers patients to manage their medication and improve adherence more simply. Recently, the company has made a change in its Board of Directors to aid the next phase of its growth for substantial US market growth opportunities. MDR has appointed Ms Linda Jenkinson as Non-executive Director, and Chair, and Chris Ridd have retired from the role of non-executive Director and Chair.

Insights of 1HFY22: During 1HFY22, the company experienced decent progress on executing on strategic growth plans, with several notable and significant achievements. MDR secured three key contracts, which will propel its advancement in expanding its digital reach.

Financial Summary (Source: Analysis by Kalkine Group)

Key Risks: The company’s operational and financial performance could be impacted by the rising market share of its peers. In addition, the business is exposed to a more complex regulatory environment; any failure in the compliances could lead the business to fines, penalties, etc.

Outlook: For FY22, the company expects to report revenue in the range of $72 million to $74 million and a gross margin of between 53-54%. In addition, MDR is focused on the digitalisation of the pharmacy network in the US.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Source: Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: The stock of MDR is trading near to its 52-week low level of $0.230, offering a decent opportunity for accumulation. The stock has been corrected by ~27.39% in the past one month. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers’ average EV/Sales multiple, considering the COVID-19 uncertainties and lower ROE, etc. For the purpose of valuation, peers such as Doctor Care Anywhere Group PLC (ASX: DOC), Beamtree Holdings Ltd (ASX: BMT), and ImExHS Ltd (ASX: IME) have been considered. Considering the expected upside in valuation, substantial growth in revenue, new contracts in 1HFY22, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.265, down by ~5.358% as on 14^th March 2022.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

MDR Daily Technical Chart, Data Source: REFINITIV

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

Note 2: Investment decision 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 Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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