Overview

• Canada advanced medical tech firm's fiscal Q2 revenue grew 15% yr/yr

• Gross margin for fiscal Q2 improved to 61.5%, up 690 basis points yr/yr

• Company reported net income up 155% yr/yr, driven by product adoption

Outlook

• Company says future pipeline for Contamination Prevention products is extremely robust

• Covalon sees rapid adoption of Contamination Prevention solutions at hospitals in the U.S. and beyond

• Company expects continued business development engagement with other vascular access firms

Result Drivers

• U.S. SALES CHANNELS - Growth in U.S. Vascular Access and Surgical Consumables and Advanced Wound Care sales channels drove revenue gains

• CONTAMINATION PREVENTION ADOPTION - Rapid adoption of CovaClear Cover dressings and VALGuard Line Guard at leading U.S. hospitals contributed to results

Company press release: ID:nBwbdLWK8a

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "buy"

• The average consensus recommendation for the medical equipment, supplies & distribution peer group is "buy"

• Wall Street's median 12-month price target for Covalon Technologies Ltd is C$2.90, about 39.4% above its May 20 closing price of C$2.08

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 13 three months ago

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