Morgans: This incredible Aussie medtech is trading at just ⅓ its real value
Health & Biotech
Health & Biotech
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As the founder sets up shop stateside, brokers at Australia’s biggest wealth manager are calling locally-listed Audeara a ‘clear buying opportunity.’
The valuation of audio and hearing-tech firm Audeara (ASX:AUA) in a new research note from Morgans is a pretty fun read.
There’s not too many analysts around which know AUA’s business trajectory any better than Morgans, the lead manager on the medtech’s initial public offer when Audeara listed on the ASX in May 2021
It seems the brokers’ faith remains strong in AUA and its unique tech, which includes the world’s only full-fidelity headphones with self-learning hearing analysis.
In what are more often guarded endorsements – or plain spoken warnings – Morgans’ analyst Iain Wilkie’s note to clients instead described Audeara to as a “clear buying opportunity.”
Wilkie, a specialist analyst in the healthcare, medical device and biotechnology sub-industries, tipped the stock to take off from its current share price of 12.5c towards 33c.
Audeara’s proprietary tech speaks directly with Cochlear implants and a wide range of cutting edge hearing aids, but the A-01 headset provides as much of an unexpected audio experience for any type of hearing ability.
The headphones are designed to optimise the communication and entertainment experience for those with and without hearing loss, while the integration of digital mobile tech provides users with on-request audibility analysis, including hearing checks and independently actionable user feedback.
What’s exciting analysts is Audeara’s Aussie-designed tech which rebalances audio output to suit each user’s unique hearing profile.
And the noise-cancelling A-01’s allow users to do this anywhere, anytime through the addition of a dedicated application.
In his note, Wilkie flagged the immense opportunity for Audeara in the US.
A bit of a step ahead, Founder and CEO Dr James Fielding has already temporarily relocated to the US to spearhead business development opportunities there.
Morgans highlighted AUA’s strong quarterly stateside sales momentum with earlier-than-expected initial sales which analysts weren’t expected to start coming in until FY23.
The company has distribution agreements with leading American audiological supplier Westone, which sees the Audeara available across some 16,000 audiology clinics.
And then there’s the deal secured with Oaktree, a leading multi-line distributor of products and clinical supplies to the US hearing industry.
Wilkie notes even now, between AUA’s two maiden distributors, Audeara is well placed to grow its business there.
Audeara reported its highest revenue on record for the December quarter, up nearly 140% year on year and 50% from the previous quarter.
It also reported a 123% increase in quarterly sales compared to the prior corresponding period which Wilkie called a “step-change” for the company.
The quarter also marked a milestone for the company with it increasing the number of audiology clinics stocking its products to more than 1,000.
Since listing, Audeara has established supply agreements with all major Australian audiology clinics including Connect Hearing and Blamey Saunders, both wholly-owned subsidiaries of Swiss hearing giant Sonova, as well as leading US supplier Oaktree Products.
Audeara’s headphones also became the only ones held in stock by Amplifon Clinics across 300 Australian sites. Amplifon is a global leader in the hearing care market, operates in 26 countries and has approximately 11% market share globally.
Audeara also recently released its latest product, the updated A-02.
The A02 TV Bundle includes the next generation of the company’s “smart” headphones and TV streamer and is now available in Australia.
The headphones feature larger buttons and a simple switch configuration for users with dexterity challenges.
They also include Bluetooth 5.0 to improve the range, enabling the headphones to be used across a wider distance and range from a user’s choice of home entertainment devices – without any loss in audio quality.
The company said the product is expected to significantly drive revenue growth in 2022 as it’s rolled out across more than 1,000 hearing clinics Australia-wide.
This article was developed in collaboration with Audeara, 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.