@Valueinvestor0909 gee, time does fly indeed! For some reason, while the 1HFY25 results suggested that clearance was imminent, "1QFY26" felt like it was still far away 2M ago, so this approval was still a welcome "surprise" piece of news.

@nessy , agreed fully. Won't see any meaningful impact on revenue until at least 3QFY26, if not 4Q, based on the schedule. But there should now be a reasomably steady stream of positive news on the progress of commercialisation which should sustain the share price until real revenue kicks in.

Of course, as always, it is now a wee bit late to top up .... ! I had 18M of decent paper losses to take action but did not ...

Wow, this has been a long time coming! I stopped following Nanosonics for a bit -- but from what i understand one of the key reasons for the delay was that biofilm buildup in endoscopes was just a super tricky technical problem. With that seemingly sorted, and the regulators happy, they have a very attractive runway..

Nanosonics is a beast of a business. Love the razor and blade model, fortress level balance sheet, it gushes free cash flow while spending heavily on R&D... what's not to love!!?? Well, for me, it was the price... it just got stoopid in the Covid era and spent the subsequent few years dropping from an ATH of ~$8 all the way to ~$3.

Even now, on a trailing basis, the PE is 120 and the P/S is almost 8x.. Would love to add it to my portfolio again, but I just find it hard to justify at the current price.

Still, the devil is in the detail here. A large chunk of their cost base is associated with growth initiatives -- R&D, geographic expansion, digital transformation (new ERP and manufacturing automation). If you just look at the Trophon business, they get EBITDA margins somewhere around 25% (based on my rough estimates, but that aligns with most mature medical device companies). At scale, you could easily see a future where revenue doubles in the next 5 years and generates a 15-20%net margin (compared with only 7.5% at present).

That would be an EPS of ~20cps, or roughly 5x what it was in FY24. *IF* they achieve that, and shares trade at a PE of 40x in 2030, you'd get a 10% compound annual return. Not terrible. So you could certainly argue shares are reasonably priced. Especially if you look at in on an enterprise value basis, and you account for the very low risk business cash flows.

I just prefer a bigger margin of safety.

So true @nessy. I was quick to buy IRL & SM portfolios and will be slow to sell. Finally some decent news.

So much time and money sunk into this approval. Imagine during that time something else came along rendering the tech / product obsolete.

Usually ramp ups don't go smooth and the approval taking this long does give the impression it may not be smooth, so rather watch from the sidelines.

A P/E of 40 in 2030 does sound aggressive to me, but I am an amateur at even a thumbsuck kind of valuation, so I defer to the experts like the mighty @Strawman :)