CardieX has got hearts racing after equities research shop MST Access placed a $1.50 valuation on the Australian cardiovascular medtech.

The price equates to an overall market cap of about $165 million versus $32 million currently, as the company is currently trading just below 30c a share on market.

MST is the second leading analyst to put a buy on CardieX in the last six months. In December, Blue Ocean Equities initiated coverage with a “spec buy” recommendation and target price of 16 cents. This was on a pre-consolidation basis equating to a target price of $1.60.

Blue Ocean highlighted CardieX’s (ASX:CDX) “early-stage growth potential and the impending nature of the FDA clearance process for the new product suite” which MST Analyst Chris Kallos also notes, flagging that the US FDA’s recent classification of the CONNEQT App as a Medical Device Data System paved the way for the launch of several consumer-facing products over the next six months.

“The app will link all CONNEQT products in a new digital ecosystem based on devices using ATCOR’s SphygmoCor® technology,” he says.

 

Commercialisation booster

CardieX last year pivoted into the consumer health space and is working on commercialising a range of wearable, consumer health apps and home health devices through manufacturing and development partnerships via its new consumer health division, CONNEQT.

The company is booking more revenues following a 5% quarter-over-quarter increase in cash receipts to roughly $1.1 million at the end of the March quarter. This boosted CardieX’s cash balance to $3.9 million as of March 31, 2022.

Kallos also noted that product development and operating costs were down $320,000 primarily due to prepaid inventory costs for new products in the prior quarter.

CardieX subsidiary ATCOR Medical’s split into two distinct companies – ATCOR and CONNEQT – last year was part of the company’s move to accelerate its go-to-market strategy.

In March this year Mobvoi and ATCOR launched the TicWatch GTH Pro – a world-first consumer smartwatch incorporating ATCOR’s FDA-cleared SphygmoCor® heart-health technology.

 

Users can monitor their own heart

“This is the first commercial implementation of ATCOR’s heart monitoring technology in a wearable device,” Kallos says.

This coupled with continued advancement towards securing FDA clearance for the CONNEQT Pulse and the CONNEQT Band products in the next financial year and a new clinical trial services agreement with Andwin Scientific has prompted MST Access to reaffirm its valuation.

“We retain our fair value estimate for CardieX at $1.50 per share based on shares on issue of 109.9m (following the 10 for 1 consolidation),” Kallos says in the just released research note.

“This represents a significant premium to the current share price of $0.28 per share.”

The CONNEQT Pulse is anticipated to be the world’s first consumer vital signs monitor to include central blood pressure and other advanced arterial health biometrics, while the CONNEQT Band is a new wearable device focused on arterial health and incorporating similar biometric parameters as the Pulse.

Kallos said the launch of both products should support integration of all products within a digital ecosystem.

This article was developed in collaboration with CardieX, a Stockhead advertiser at the time of publishing

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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