Following
-
-Morgan Stanley underwhelmed by SaaS benefits to date
-Brokers remain generally Buy-rated
-Rollout of new system to counter chip shortages
By
Medical device and software company
The
The aim of all three acquisitions in the connected care space is to integrate medical devices with enterprise software to reduce the cost of healthcare delivery.
The newly acquired software and data solutions extend across three out-of-hospital care verticals:
Morgans believes the new company will complement
While management anticipates the latest transaction will be earnings accretive, brokers generally retain their existing 12-month target prices.
The company also addressed recent constraints imposed by a shortage of 3G/4G communication chips. To negate the need for these chips,
The company acknowledged it had previously over-estimated the extent to which it could capitalise near-term from the absence of major competitor Philips in the market.
At the end of April, management revised down guidance for the FY22 revenue tailwind from Philips' product recall to
Motivation for the Medifox Dan acquisition
The recent Digital Healthcare Act in
As a result, a fast-track process has been introduced for rapid approval, testing, and reimbursement of digital health apps for regular care.
While the broker expects few synergies from blending the new acquisition with
Nonetheless, as for the
Morgan Stanley also expresses reservations when comparing the high purchase price relative to prior SaaS acquisitions. The broker also notes that while
Meanwhile, Wilsons feels the valuation multiple for the recent purchase will only makes sense when incremental medical device sales eventuate.
More positively, Macquarie remains upbeat on overall earnings growth for
Add-rated Morgans increases its FY23-24 earnings estimates for the company by up to 1% after including the Medifox Dan acquisition, though also takes the opportunity to lower the FY22 earnings forecast by -2.7% on ongoing supply-chain constraints.
The FNArena database has five Buy (or equivalent) broker ratings and one Equal-weight rating. The average target price of
For those brokers not updated daily in the FNArena database, Goldman Sachs and Jarden are Buy-rated (or equivalent) and Wilsons retains its Equal-weight rating. The average target price set by the three is
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