Nanosonics: Flexible timeline on launch

About the author:

Author name:

By Scott Power

Job title:

Senior Analyst

Date posted:

23 August 2023, 7:00 AM

Sectors Covered:

Healthcare, Life Sciences

• Nanosonics' (ASX:NAN) FY23 results came in at the top end of guidance however focus centred around timing of CORIS®, which has been delayed by at least six months. Disappointing, but not unsurprising.
• Increased costs associated with upgrading back-office systems as well as further regulatory costs to bring the device to market will provide an earnings drag through FY24, rolling off in FY25. No major impact to long-term earnings trajectory.
• Overall, a mixed result with the FY24 outlook fairly muted prior to a pick-up in FY25 and beyond. Following model roll-forward and a number of assumption adjustments, our valuation reduces marginally to (login to view) and we retain our Add recommendation.
• We see this one as being fairly range-bound until key catalysts are approached. No issues over the long term, but for now see shorter term trading as a reasonable way to make money on this stock.

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