ScoPo’s Powerplay – Impedimed sell down an ‘overreaction’
Brisbane-based medical software technology company share price has fallen 22% in the past five days after release of its Q2 FY24 cashflow report which was below expectation.
IPD recorded unaudited total revenue of $2.3 million for Q2 FY24 compared with $2.5 million for the preceding quarter.
However, in a note to clients Morgans says they believe the selling pressure was an “overreaction” with excellent progress being made with private payor coverage and it was always going to be a difficult quarter given recent board and management changes.
Power says IPD appears to have put the board stoush behind them in 2024 with new leadership including the appointment of Dr Parmjot Bains as managing director and interim CEO.
He says IPD is also starting to capitalise on inclusion in the US National Comprehensive Cancer Network (NCCN) of Bioimpedance Spectroscopy (BIS) as an objective measurement tool to identify early signs of lymphoedema.
IPD focuses on non-invasively measuring, monitoring, and managing fluid status and tissue composition using BIS medical technology with its SOZO device.
IPD highlight that 13 States in the US have reached critical mass with 80% of population covered for reimbursement from private payors or Medicare, which is up from two States in Q1 FY24.
The target is that 85% of the US will be providing coverage by the end of FY24. The company had a cash balance at December 31 of $36.9 million.
“There second story was below expectation but that’s not really the story and it’s all about the future and the next number of quarters,” he says.
“They have identified 11 critical States they need to focus on and already have seven where there is more than 80% coverage between Medicare and the private payors.
“They expect to have the remaining signed up April and 85% of the US signed up by June so these are key milestone we’re looking at and see the weakness in the share price as a terrific opportunity to build positions.”
Morgan’s maintains its speculative buy recommendation but reduced its 12-month target price to 20 cents from 22 cents.
Think about it this way.
10 months ago we got NCCN. SP above 0.10.
8 months ago we have NCCN and 1 critical mass state SP 0.20
Now we have NCCN & 13 critical mass states SP<0.10
Over that period when is the better buying opportunity NOW.
disclosure I did acquire stock below Fridays closing price.
Kind regards
Acclivity
