Polynovo Limited

ASX:PNV

Polynovo Limited

ASX:PNV
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$1.205 (+0.4%)
Last close price
#38
Rank
27
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Reports (12) My Report Forum Investors
Forum Topics PNV PNV Upgrade on Q1 FY26 Result

Pinned straw:
Rick
Last edited 2 months ago

There’s a bit of excitement in the market today on the back of PNV’s Q1 FY26 Trading Results announced yesterday. Evan’s & Partners have now rated PNV as a Speculative Buy with a $2.65 price target. Macquarie retained its Outperform rating and the $2.00 price target. Overall, I’m quite happy to hold the business. If revenue continues to grow at this rate it might look cheap in a year from now! I am expecting earnings growth and ROE to be both around 25% going forward. It currently holds more cash than it has debt, so it’s starting look like a reasonable investment again!

Trading Results Q1 FY26 (unaudited)

PolyNovo Limited is pleased to provide unaudited trading results for Q1 FY26.

  • Q1 FY26 Group sales were A$34.7m up 33.3% on STLY of A$26.0m
  • U.S. sales were A$27.4m up 33.4% on STLY of A$20.5m
  • Rest of World sales were A$7.3m, up 33.1% on STLY of A$5.5m.
  • NovoSorb MTX sales of A$2.9m up 174.8% on STLY A$1.1m
  • Strong collections from U.S. customers, with days sales outstanding (DSO) averaging 61 in Q1FY26 down from 95 DSO in March 2025.
  • The new R&D Innovation Centre is complete and operational, and capex is finished.
  • Building works of the new manufacturing facility are now complete with circa A$2.5m in capital expenditure required to make operational.
  • Q1 FY26 was EBITDA positive and cash on hand on 30 September 2025 was A$23.2m.

Chairman, David Williams said: “There is a lot to like and be proud of in the continued growth in sales, hospitals supplied, patients treated, countries supplied and surgeon engagement. Beyond these indications of continued growth, the real excitement for me is in:

• The near-term possibility of moving into the U.S. outpatient market and supporting plastic surgeons, podiatrists and home care. Proposed changes to U.S. pricing in CY26 will reinforce our market opportunity. Our new CEO and Board Director will add strength to that push.

• NovoSorb MTX has had tremendous growth off a low base, but our team are very bullish on the prospects in the U.S. and the rest of the world.

• I have observed before the slow start to sales in places like the United Kingdom but then followed by a ramp in sales. It is very exciting to see in Q1 FY26 that ramp in countries like Turkey up 97%, Germany 269% and Canada 63%

Held IRL & SM
mikebrisy
Added 2 months ago

@Rick I agree that $PNV looks interesting.

With US Sales growth holding up at +33%, this is highly favourable in the peer group of $ARX, $IART and $AVH, indicating that BTM/MTX are continuing to take market share.

RoW at +33% indicates that this appears to have stabilised at a lower rate, with an almost 4:1 US:RoW revenue split.

I'll have to dust off my model, but with the capex behind them, $PNV is going to start throwing off cash soon - depending on their rate of investment into sales and marketing. So, I think I will hold off any potential re-entry to this until I see the 1H financials. Of course, by then the SP will probably have moved against me!

Good that a CEO has also been appointed.

Disc: Not held since 17/01/2025

16
Rick
Added 2 months ago

@mikebrisy, you may already have Macquarie’s projections from DW. Just in case you don’t hear they are. I’d be pretty happy with this outcome!

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14
mikebrisy
Added 2 months ago

@Rick I agree, but if you look back at the history, Macquarie have always been pretty bullish on their PTs. I recall they had a PT of $2.85 back in January 2023.

I'm still not sure what cash margins $PNV will deliver, as they have recently expanded US sales force again, which maybe explain the revenue progress.

Still a quarter of +33% on revenue vs. Macquarie's +24% for the FY bodes well for operating cash flow, particularly given that they seem to have given some attention to actually collecting the cash.

Over the years, $PNV has done very well for me. But I am always wary of DW's promotional approach.

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