Don’t let the price of SANUWAVE Health (OTC: SNWV) stock fool you. For all intents and purposes, SNWV is in its best position ever to create enormous shareholder value during the remainder of this year. And two deals announced last week confirm that the company is operating on all cylinders to maximize both US and international market opportunities. Moreover, with the expected filing of its year-end report later this month, SNWV may not only set another round of quarterly records but may also confirm its guidance to post a record-setting performance in 2021.
Here’s what to know today. And it’s bullish to the thesis.
In the past five trading days, SANUWAVE announced two deals extending the reach of its two primary assets, dermaPACE and UltraMIST, into international markets. The first is with DocShop Pro, with whom SNWV entered into a non-exclusive reseller agreement to market and sell the SNWV’s portfolio of wound care products within the physician office channel. The deal immediately broadens the company’s commercial footprint and expands its ENERGY FIRST platform.
A second partnership with Labb Solutions makes that company the exclusive multinational distributor of its dermaPACE and UltraMIST energy-based medical systems in Turkey, Georgia, Azerbaijan, Belarus, and Kazakhstan. This deal accelerates SNWV’s international expansion strategy and will leverage Labb Solutions’ leadership position in Turkey and select countries from Eastern Europe and the Middle East to distribute innovative medical technologies. Notably, SANUWAVE said that the first ten dermaPACE systems have been ordered and shipped to Turkey.
The great news is that while deals can be accretive for most of 2021, they may be a precursor of more to come. And analysts covering the company may respond favorably.
Analysts Are Bullish
SANUWAVE is not the only one bullish on its 2021 prospects. Analysts at Lake Street Capital expect revenues to reach record levels, estimating sales to reach upwards of $25 million this year. They also model a substantial increase in the company’s stock price to $0.34 a share, representing a more than 86% gain from current levels.
Lake Street points toward the company’s strong product pipeline to justify its bullish thesis. They expect growth from its flagship asset, dermaPACE®, an energy-based system that utilizes Pulsed Acoustic Cellular Expression (PACE®) Technology. DermaPACE® is the first to use PACE-specific proprietary protocols for wound treatment.
They further value the transformative acquisition of UltraMIST made in 2020. That asset already helped SNWV to a record-setting Q3. Moreover, it pushed analysts to revise their revenue estimates higher, noting that with high margins and increasing reimbursement coverage, the company could post its best-ever operating results in its history. Notably, before UltraMIST was purchased by SNWV, it delivered more than $15 million in revenues and produced $4 million in EBITDA to its former owner. There’s more.
Another 2020 acquisition has SNWV acquiring exclusive worldwide rights to WoundShield®. This innovative patch-based therapeutic device facilitates tissue regeneration and wound healing using ultrasound to increase local capillary perfusion and tissue oxygenation. Currently, SANUWAVE said it is seeking regulatory approval to market WoundShield® in Europe and the United States, with NanoVibronix keeping the sole right to manufacture the licensed products. The deal could create additional revenue streams. It also puts other catalysts in play.
Still, it’s the near-term that has investor’s attention.
Record-Setting Expectations For 2021
While investors expect a record-setting Q4 despite the business headwinds created by COVID-19, the more notable expectation is for a record-setting performance in 2021. Guidance there could push the stock meaningfully higher with analyst’s bullish target in the crosshairs. Better still, confirmation of an expected 2021 run-rate of at least $25 million, which would result in a 500% increase in YoY revenues, could result in a substantial rally based on revenue models alone.
March is a telling period for SNWV. And the expectation is that the company will deliver on revenue growth and market development. That’s despite the challenges faced during the ongoing pandemic. Thus, going forward, investors may be on point to expect better results this year. Moreover, with acquisitions likely, a growing sales force, better margins, and products targeting a billion-dollar diabetic wound care market, SANUWAVE, as noted, maybe in its best position ever to maximize and monetize its global opportunities.
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