Have taken a small position in Aroa Biosurgery which is a soft-tissue regeneration company that develops, manufactures and distributes medical and surgical products to improve healing in complex wounds and soft tissue reconstruction. A NZ company with huge growth to date and a bright future with a large market they say. Have been following it since it listed on the ASX and think the current share price is attractive. The CEO and founder Brian Ward has 33m shares which is over 9 percent of the total shares.
Brian recently told NBR that he thinks the company is undervalued and expects revenue to surge by up to 40 percent in the second half due to new products.
Wilson's latest says
We maintain our OVERWEIGHT rating on Aroa with a revised price target of $1.60/share. Aroa are clearly developing a sophisticated, high- growth company, with revenue and earnings predictability becoming far clearer. With management guiding to NZ$4-5M EBITDA in 2H24e, investors are right to extrapolate this out to see Aroa delivering >$10M EBITDA in FY25e and >$20M EBITDA in FY26e. Revenue growth and earnings leverage should see ARX rewarded in the next 12 mon
Click on link below for latest annual report
https://aroa.com/wp-content/uploads/2023/07/FY23-Annual-Report.pdf
Disc/ Only a small position and it's just a punt.
Nine small-cap stocks tipped to soar in 2024 (from AFR ). This is one of Pies largest positions
With investors anticipating rate cuts from the US Federal Reserve and Reserve Bank of Australia in 2024, the bombed out small-cap sector is being touted for big gains as risk appetite returns.
The S&P/ASX Small Ordinaries Index has dropped 23.3 per cent to 2708.6 points since the end of 2021 as the fastest interest rate tightening cycle in a generation erased confidence in a sector that feeds off animal spirits and the lure of huge returns.
Michelle Lopez says med tech businesses Aroa Biosurgery and Pro Medicus could deliver in 2024. Rhett Wyman
"Small caps have been smashed because liquidity was pulled out as interest rates climbed and people didn't want to get caught in small companies if there's a recession," Ophir Asset Management co-founder Andrew Mitchell says.
"If the Fed cuts rates, say in May or June, you could take the view small caps rip from these low levels," he says.
"When the Fed cut rates in December 1974, small caps soared and were the best performing sector on the sharemarket for several years, so if you think you can pick the eyes out of it and buy them lower [than right now], you'll probably miss out."
But rate cuts don't necessarily mean small-cap investors are out of the woods, Mr Mitchell warns because there are persistent fears that less mature businesses will suffer from an economic downturn characterised by weak consumer spending and rising unemployment.
The higher interest rates available on cash in 2023 – around 4 to 5 per cent – also means smaller companies find it harder to raise money to fund the losses often required to deliver strong growth, or finance interest charges on debt.
"Unprofitable tech has been hit very hard," says Mr Mitchell. "We think this could be overdone especially in the micro-cap space."
Nine stocks for 2024
Mr Mitchell names sports hardware and software seller Catapult Sports as a small-cap that could outperform in 2024 and says he thinks it could grow sales at a compound rate of 20 per cent for the next several years, with gross profit margins rising to 80 per cent.
"The stock trades at 1.8 times sales now, we think at 80 per cent gross profit margins it should trade at five times sales," he says.
"If they grow the top line at 20 per cent for the next three or four years you double the revenue, and then you put that on five times sales, it has potential to be a $1 billion business, it's currently valued just over $200 million."
Another small-cap stock picker, Michelle Lopez, the head of Australian equities at Pie Funds Management, names Aroa Biosurgery as a business near an inflection point of strong sales growth tipping it into profitability.
Aroa straddles the intersection of medicine and technology, and Ms Lopez says the $235 million biotech may jump in 2024. The biotech produces soft tissue regenerative medicine products that heal complex wounds and Ms Lopez says it has grown sales at a 30 per cent compound rate over the past five years.
"The company is founder-led, has a high level of cash on balance sheet and a well controlled investment program," she says.
"Importantly, profitability is at an inflection point as Aroa scales prior year manufacturing, sales and research investments. Management guided to $1 million to $2 million underlying EBITDA in financial 2024, which implies a strong profit contribution in the second half of the financial year. We expect it will scale rapidly and support strong returns to shareholders."
Quote from: Shareguy on Jan 23, 2024, 12:23 PMNine small-cap stocks tipped to soar in 2024 (from AFR ). This is one of Pies largest positions
With investors anticipating rate cuts from the US Federal Reserve and Reserve Bank of Australia in 2024, the bombed out small-cap sector is being touted for big gains as risk appetite returns.
The S&P/ASX Small Ordinaries Index has dropped 23.3 per cent to 2708.6 points since the end of 2021 as the fastest interest rate tightening cycle in a generation erased confidence in a sector that feeds off animal spirits and the lure of huge returns.
Michelle Lopez says med tech businesses Aroa Biosurgery and Pro Medicus could deliver in 2024. Rhett Wyman
"Small caps have been smashed because liquidity was pulled out as interest rates climbed and people didn't want to get caught in small companies if there's a recession," Ophir Asset Management co-founder Andrew Mitchell says.
"If the Fed cuts rates, say in May or June, you could take the view small caps rip from these low levels," he says.
"When the Fed cut rates in December 1974, small caps soared and were the best performing sector on the sharemarket for several years, so if you think you can pick the eyes out of it and buy them lower [than right now], you'll probably miss out."
But rate cuts don't necessarily mean small-cap investors are out of the woods, Mr Mitchell warns because there are persistent fears that less mature businesses will suffer from an economic downturn characterised by weak consumer spending and rising unemployment.
The higher interest rates available on cash in 2023 – around 4 to 5 per cent – also means smaller companies find it harder to raise money to fund the losses often required to deliver strong growth, or finance interest charges on debt.
"Unprofitable tech has been hit very hard," says Mr Mitchell. "We think this could be overdone especially in the micro-cap space."
Nine stocks for 2024
Mr Mitchell names sports hardware and software seller Catapult Sports as a small-cap that could outperform in 2024 and says he thinks it could grow sales at a compound rate of 20 per cent for the next several years, with gross profit margins rising to 80 per cent.
"The stock trades at 1.8 times sales now, we think at 80 per cent gross profit margins it should trade at five times sales," he says.
"If they grow the top line at 20 per cent for the next three or four years you double the revenue, and then you put that on five times sales, it has potential to be a $1 billion business, it's currently valued just over $200 million."
Another small-cap stock picker, Michelle Lopez, the head of Australian equities at Pie Funds Management, names Aroa Biosurgery as a business near an inflection point of strong sales growth tipping it into profitability.
Aroa straddles the intersection of medicine and technology, and Ms Lopez says the $235 million biotech may jump in 2024. The biotech produces soft tissue regenerative medicine products that heal complex wounds and Ms Lopez says it has grown sales at a 30 per cent compound rate over the past five years.
"The company is founder-led, has a high level of cash on balance sheet and a well controlled investment program," she says.
"Importantly, profitability is at an inflection point as Aroa scales prior year manufacturing, sales and research investments. Management guided to $1 million to $2 million underlying EBITDA in financial 2024, which implies a strong profit contribution in the second half of the financial year. We expect it will scale rapidly and support strong returns to shareholders."
I hope they do better for you than Alcalcidion Group, one of the other eight picks...that's slowly going down the gurgler...
Not so far. Todays downgrade not helping either.
The share's been tanking - seriously over-done surely at 54.5c ?
Quote from: Davexl on Feb 02, 2024, 04:17 PMThe share's been tanking - seriously over-done surely at 54.5c ?
I think so. Added to my holding this morning.
https://stockhead.com.au/health/stock-insiders-aroa-biosurgery-isnt-wasting-time-counting-sheep/
It's easy to talk about your winners. However, we're
committed to being candid and not all investments go
according to plan. A small position which detracted from
performance was Aroa Biosurgery (ASX:ARX).
ARX is a soft tissue regeneration company which develops
and manufactures medical devices used primarily in
trauma, hernia and breast reconstruction surgeries.
Founded in 2008, ARX is a New Zealand success story
which ticks a number of our four Ps (Potential,
Predictability, People and Profitability). ARX's value
proposition is faster healing with lower complication rates at
a cheaper price. This proposition has proved compelling,
with revenue growing from $22m in FY21 to $67m-$70m in
FY24. However, FY24 has proved a challenging year.
In November, ARX revised guidance driven partially by
softer sales of a key product Myriad. We materially reduced
our position but retained a small holding given ARX's
potential. This was a mistake.
In January, ARX downgraded FY24 guidance due to lower
than expected sales. Lower sales were attributed to a
myriad of issues including inventory management, a
delayed product launch, lower procedure levels and staff
holidays.
Despite the downgrade, ARX's has plenty of potential:
sales are growing strongly, FY25 should provide an
inflection in profitability and ARX remains well capitalised
with $30m of cash and no debt. However, with investor
confidence wounded, the market will likely require evidence
of execution before ARX achieves a recovery.
DiscoveryFunds Jan musings -I assume you've seen this shareguy but others may not have.....
Yes thanks Crackity have seen it. Pie funds have a large holding in their growth fund as well. I understand they are holding onto it and paid way more than current price.
What I like is $30m cash and according to cash flow report 18 Estimated Quarters of funding available. Yet are close to break even with small loss this year. I see it as a delay to profitability.
Looks like a great product with huge growth potential.
For those that are interested. Latest Wilson's note
maintain our OVERWEIGHT rating on Aroa Biosurgery however, reduce our PT to $1.00/sh. In the year that Aroa was meant to finally deliver 'proper' earnings, corrections to revenue share assumptions for OviTex has triggered a guidance downgrade. The financial hit is perhaps less significant than that to sentiment, because it reaggravates the argument that Aroa's OviTex business (partnered with TELA) is of lower revenue quality. The next opportunity for Aroa to reinvigorate interest amongst the investor base will be: a) at TELA's result in March (OviTex guidance for FY24); and b) ARX's full year results in May – to demonstrate that despite a 6-month hiccup, fundamentally, the stock is capable of delivering on earnings in FY25E and beyond. Yesterday's 14% hit to share price is likely overdone, however understandable as investor patience wanes. Simplistically, meeting revised guidance and confirming a credible FY25E EBITDA target should at least see ARX trade back in line with its 2-year trailing EV/Rev multiple of 4.0x (now at 2.3x), and ~in line with sector median, which is where our PT now sits.
| Key Points
3Q24 summary. Aroa downgraded revenue guidance for FY24 by approximately 8%, now targeting revenue of NZ$67-70M (WILSe: NZ$75.5M). We estimate that the downgrade splits roughly 60:40 across OviTex and MYRIAD. The OviTex component stems from a new product delay, project payments and having misjudged the revenue 'true-up' in respect of transfer sales to TELA Bio (assumption of percentage stock sold during the period). Aroa's MYRIAD sales guidance also came under pressure, having positioned the product to concentrate on larger trauma procedures. Revised EBITDA guidance is now for a loss of NZ$1-3M (previously positive NZ$1-2M) reflecting the revenue shortfall. Aroa closed 3Q24 with NZ$30.6M cash.
Thoughts on MYRIAD. In terms of MYRIAD, we are cautious not to read too much into the miss in FY24, given earlier stage launches are more impacted by seasonality (surgery rates, sales rep availability), however delivery of at least 70% growth in FY24 is key to maintaining confidence on MYRIAD driving revenue, margin and earnings for the next ≥2 years. On p.3 of this report we include our revised forecasts (minimal changes from FY25E onwards), in order to highlight our longer-term expectations for this product vs. what has been achieved with OviTex.
Forecast changes. Detailed forecast changes are provided on p.3. FY24E changes are in line with updated guidance, and reflect $7.3M (abs) revenue downgrade to previous estimates, driven by OviTex ($3.9M) and MYRIAD ($3.4M), noting we had 100% growth for MYRIAD baked in. FY24E earnings changes are moderated by a lower R&D spend, given the delay in projects with TELA, as well as favourable Fx (0.60 USD:NZD, vs 0.62:NZD). FY25E now looks for 40% growth in OviTex sales (cc basis, guided by TELA's FY23 result in Feb) and 50% growth in MYRIAD (cc basis, representing 3% downgrades). ENIVO revenue (NZ$1.7M) shifts to FY27E. FY26E earnings now includes an additional $2M in R&D spend ear-marked for ENIVO.
Valuation. Our new PT reflects CY24 EV/Rev multiple of 4.0x, sitting in line with its 2-year trading range (95% CI), roughly in line with sector median (3.5x), and a 38% discount to fundamental DCF ($1.62/sh). For reference, forecast changes drove DCF downgrades of 9%, noting rfr increase to 4.0% was updated in late 2023 (already reflected). Previous premium attributed (6.0x) removed until ARX demonstrates revenue quality, profitability, and competitive moat benefits.
You know all those funds are just talking up the stock while they are dumping their holdings, right?
Only need to look at the volume in the last 2 weeks to see that instos are selling out.
Quote from: KW on Feb 06, 2024, 03:55 PMYou know all those funds are just talking up the stock while they are dumping their holdings, right?
Only need to look at the volume in the last 2 weeks to see that instos are selling out.
Maybe. Pie has 14 m alone. Up 5 percent today 🤷
Quote from: Shareguy on Feb 06, 2024, 06:31 PMMaybe. Pie has 14 m alone. Up 5 percent today 🤷
Low volume day. The NZ instos are on holiday, its Waitangi Day :-)
Interesting article I thought.
https://stockhead.com.au/health/aroa-biosurgery-targets-sales-growth-and-operations-cash-flow-positivity-in-fy25/
There was a large seller last week and the share price got a hammering I think on their US partner not meeting guidance. Added to my position. It's been on the way up since and I'm in the green at moment.
Interesting company with huge potential. First cape have been adding.
Latest Wilson note
Investment View
TELA Bio (TELA) missed estimates in 2Q24, reporting US$16.1M OviTex revenue (WILSe:
US$18.4M) but maintained full year guidance at US$74.5-76.5M. Similar but independent cyber-
attacks impacted a national GPO and hospital customer, impacting revenue by ~US$1.5-2.0M.
We maintain OVERWEIGHT rating and $1.00 PT on Aroa Biosurgery. Minimal impact to ARX.
| Announcement Highlights
Aroa's US channel partner TELA Bio released 2Q24 results. OviTex revenue of US$16.1M was below our forecast (WILSe: US$18.4M) representing
11% growth vs pcp. The FY24 revenue guidance range was maintained, noting a recovery in volumes in 3Q. The impacted GPO (Ascension) was a
relatively new channel partner and growing quickly. The incident emerged in early May and was resolved within a few weeks. TELA estimates an impact
of US$1.25-1.75M from this event. Separately, a large hospital customer with similar issues experienced a shortfall in volumes worth ~US$0.25M to
TELA. TELA closed 2Q24 with US$26.5M cash (net debt of US$14.3M).
| Wilsons' View
Initial analysis
Revenue and product performance. Competitive position in larger complex ventral hernia repairs remains solid with underlying product growth at 29% v
pcp and ~70% of US sales (balance is PRS). Management's focus is now turning to enter larger volume (smaller size) segments with the IHR product
targeting inguinal repairs (building on the success of LPR in laparoscopic/robotics). TELA provided new colour on European sales (US$2.4M sales v
US$1.5M in the pcp).
Capital adequacy. TELA made a US$11.6M operating loss in 2Q24 and probably needs to raise capital again this side of Christmas. The business has
worked hard to optimise its SKU mix, reduce stock obsolescence and improve gross margins (69% in 2Q24). The top-line aberration in 2Q24 has led to only a
minor deterioration in cash flow metrics (Figure 1). As a reminder, we see a largely normalised outlook for OviTex ordering patterns in FY25 for Aroa (growth
of Aroa's OviTex share of ~22%). TELA re-iterated its goal to reach profitability but US consensus sees losses through to at least FY27e.
Might explain the share price. Out today
https://www.sharesinvalue.com.au/wp-content/uploads/2024/08/Aroa-Biosurgery_Initiation-Report-FINAL.pdf
Nice update today. Looks like it's going to plan.
Hope you are still holding Shareguy. ARX has finally come good. Stock has broken out on strong volume, cleared key resistance levels, and is now working off that overhead. Moving averages now all in alignment. TA looks good. I'm in ;D
Screenshot 2024-11-28 123847.png
Quote from: KW on Nov 28, 2024, 12:39 PMHope you are still holding Shareguy. ARX has finally come good. Stock has broken out on strong volume, cleared key resistance levels, and is now working off that overhead. Moving averages now all in alignment. TA looks good. I'm in ;D
Screenshot 2024-11-28 123847.png
Yes KW. Doubled holding again recently. All looking good for back over $1. Pie funds have a big position in their growth fund.
Insert from Wilson's latest note said
DCF derived price target moderates to A$1.59 per share or
13.5% lower than last time. Our base case DCF 'spot'
valuation for Aroa is $1.44 per share (Figure 4). The three
drivers of our downgrade are a) the deferred contributions
from SYMPHONY and ENIVO; b) a shallower trajectory for
margin leverage from the immediate business reducing near
term free cash flows; and c) the 2% devaluation of NZD
relative to AUD in translation. A DCF-informed 'target price'
estimate of $1.59 is calculated by rolling the spot valuation
forward at the WACC.
Price target set at 4.1 x FY25e EV/revenue. This has been our
practice with Aroa for some time, expressing a 'view' that the
stock should trade ahead of medians in what can be a highly
variable sector peer group (Figure 5). At the current share
price (which implies 2.7x FY25e EV/revenue), the market is
applying a 20% discount to Aroa (relative to sector median at
3.4x EV/revenue). The market's unwillingness to pay more for
Aroa likely stems from two (related) issues. Aroa's
investment into its direct business is yet to produce sufficient
earnings leverage and scale to decouple the stock from
TELA's 'raise and spend' cycle. Whilst MYRIAD has been
successful over the last ~3 years, the two other focal points
from Aroa's product pipeline (SYMPHONY and ENIVO) have
both been 'around' since IPO, but neither is commercialised
$70c holding. Looking good with volume
https://stockhead.cmail19.com/t/d-l-sykgjd-yupddjlly-i/
Quote from: lorraina on Jan 07, 2025, 05:48 PMhttps://stockhead.cmail19.com/t/d-l-sykgjd-yupddjlly-i/
Thanks for posting Lorraina. Similar article in Business Desk this morning. Great potential.
Big miss today, as guidance lowered from $80m-$87m to $76m-$79m and EBITDA from $2m-$4m to $0-$2m.
The explanation given was that Hurricane Helene took out an IV Fluid factory in North Carolina, which impacted hospitals ability to do surgery. Google says that was true:
Hurricane Helene significantly impacted the IV fluid supply in the United States by flooding a major manufacturing facility owned by Baxter International in North Carolina, which produces a large portion of the nation's IV fluids, leading to widespread shortages in hospitals across the country; this disruption caused issues with patient care due to the critical role IV fluids play in medical treatments.
Key points about the impact:- Affected facility: Baxter International's North Cove plant in North Carolina.
- Production impact: This plant produces roughly 60% of the nation's IV fluids.
- Consequences for hospitals: Due to the production halt, hospitals faced significant shortages of IV fluids, potentially impacting surgeries and other medical procedures.
So the downgrade may be due more to an Act of God than mismanagement. We shall see.... An update from Baxter today said
"We continue to make strong progress at North Cove and have now restarted all of the site's 10 manufacturing lines. While some lines require additional time to ramp up production, we currently expect to be producing at pre-hurricane levels across the plant early in the first quarter of 2025."
Quote from: KW on Jan 29, 2025, 06:20 PMBig miss today, as guidance lowered from $80m-$87m to $76m-$79m and EBITDA from $2m-$4m to $0-$2m.
The explanation given was that Hurricane Helene took out an IV Fluid factory in North Carolina, which impacted hospitals ability to do surgery. Google says that was true:
Hurricane Helene significantly impacted the IV fluid supply in the United States by flooding a major manufacturing facility owned by Baxter International in North Carolina, which produces a large portion of the nation's IV fluids, leading to widespread shortages in hospitals across the country; this disruption caused issues with patient care due to the critical role IV fluids play in medical treatments.
Key points about the impact:
- Affected facility: Baxter International's North Cove plant in North Carolina.
- Production impact: This plant produces roughly 60% of the nation's IV fluids.
- Consequences for hospitals: Due to the production halt, hospitals faced significant shortages of IV fluids, potentially impacting surgeries and other medical procedures.
So the downgrade may be due more to an Act of God than mismanagement. We shall see....
An update from Baxter today said
"We continue to make strong progress at North Cove and have now restarted all of the site's 10 manufacturing lines. While some lines require additional time to ramp up production, we currently expect to be producing at pre-hurricane levels across the plant early in the first quarter of 2025."
Thanks KW. Savage share price re action. I guess to be expected given how the share price had increased. The exchange rate would have helped which makes this worse plus a $1.6m tax refund in the quarter. $19.5m cash receipts from customers against last quarter $19.9m.
Oh what to do....
Quote from: Shareguy on Jan 29, 2025, 06:43 PMThanks KW. Savage share price re action. I guess to be expected given how the share price had increased. The exchange rate would have helped which makes this worse plus a $1.6m tax refund in the quarter. $19.5m cash receipts from customers against last quarter $19.9m.
Oh what to do....
The new guidance is constant currency, the actual revenue will be $80m-$84m which incorporates the lower exchange rate.
The company did not help itself by not explaining the cause of the downgrade in the ASX announcement, but only during the investor call when someone asked the question. Lack of liquidity in a small cap did the rest of the damage.
If it stays under the 200 day MA I'm going to be stopped out regardless. Its likely to be stuck back in its prior trading range from before the breakout with 64c back as its resistance level. FA wise, its a judgement call as to whether management are bullshitting or not as to the cause in the sales slowdown. What has past history shown us with respect to management integrity? (I've not been following it over the years).
I'm intrigued. As a great preserver of capital...did you bail?...lol
No holding for me but interesting company and product so thanks for sharing
My original purchase was a punt and not a large holding for me. Even at current pricing I'm still in the green. I did look at selling but I like the product. NZ company and the latest research is very positive. Top line growth and they are selling more products directly. Will continue to hold at this stage. It was priced for growth and a possible upgrade. Just think it came up to fast from year low $.44 and being a small cap just got punished when results were not as expected.
I see this as a high risk sector but the rewards are there if it all works out. Quarterly reporting is great so not long to wait and see. This is not the first time that the company has missed guidance and probably won't be the last.
Analysts seem positive
Insert from Wilson's latest (note from KW post re saline shortage is mentioned)
3Q25 | TELA running a tighter ship
We maintain our OVERWEIGHT rating on Aroa Biosurgery (ARX) with a revised PT of $0.75/share.
It's clear that softer than expected OVITEX sales to TELA was the main factor behind the company's
3Q25 guidance downgrade. Part of that will be temporary factors (e,g disrupted volumes with the
US market, short on saline and other surgical supplies during the Dec-Q). We went into the 3Q25
result half expecting an upgrade, given that Aroa's OVITEX partner (TELA) had recently raised
capital and had 'come out swinging at its 3Q24, last year. Our sense is that TELA may be running
even tighter inventory levels now to support growth and this idea lies behind our forecast changes.
The string of downgrades over FY24-25 makes it difficult to pay a premium for Aroa. Our new PT
represents 3.0x CY26e EV/revenue, which is close to the international wound care sector median.
MYRIAD keeps performing but Aroa can only rebuild its valuation premium by getting well clear of
break-even. Leverage depends on extracting more from assets like SYMPHONY and ENIVO.
| Key Points
3Q25 update and guidance. Aroa's 3Q25 cash receipts of NZ$19.5M missed our forecasts by
~10%. Further, Aroa downgraded its FY25 guidance as follows: revenue of NZ$76-79M (a 7%
cut at the midpoint), and EBITDA of NZ$0-2M, both assuming 0.64 USD/NZD. In reported terms
(assuming 0.60 USD/NZD), the revised guidance is NZ$81-84M and NZ$2-4M (WILSe: NZ$81M
and NZ$1.9M, respectively). Our forecasts assume ~0.60 USD/NZD for 2H25e. Although no
product level sales information was shared, our assessment is that the change in guidance
disaggregates (~2:1) between OVITEX and MYRIAD. Aroa echoed several of its
surgical/reconstruction peers in calling out a disrupted Dec-Q due to general product shortages e.g saline).
Morgan's say
Aroa Biosurgery's 3Q operating cash flow met Morgans forecast, however, management narrowed its FY25 guidance for revenue to a range of NZ$81-84m from NZ$80-87m and for normalised EBITDA to NZ$2-4m from NZ$2-6m.
The broker attributes the revenue guidance cut to weaker TelaBio revenue for hernia repair and intravenous product shortages.
The analysts' forecasts for FY26 and FY27 revenue are reduced by -5%, with a -17% and 1-5% impact on earnings (EBITDA), respectively.
The broker lowers the target price to 93c from $1.05. Add retained.
I won't be buying anymore at this stage.
Cheers Shareguy, yes you were very clear when you bought in it was a bit of a punt.
Such a long gestation period to profitability for these companies.
Sounds like might be a temp blip as KW alluded.
was more thinking more of KW...recent purchase...the chart got her in and was wondering if the chart got her out or just fast fingers... or maybe still in.
Good luck and thanks for posting.
Probably good time to buy some if you believe the story and road to profitability
Aroa are now using 60c as the average forex rate, but that is now down to 56c and likely to stay there for the rest of the year (if not go lower as the US$ appreciates and the RBNZ continues cutting interest rates while the Fed holds).
Its only a small position for me, and as its allegedly a "non-structural" issue, I'm still holding to see if it can bounce from this point. But if I see something on the market that I want to buy, and I dont have any spare cash, its first in the queue for the chop.
Tela (ARX US partner):- Delivered revenue of $17.6 million in the fourth quarter and $69.3 million for the full year 2024, representing growth of 4% and 19%, respectively, over the corresponding periods of 2023;
- Increased demand for OviTex® and OviTex PRS Reinforced Tissue Matrix products during the full year 2024, resulting in growth in unit sales volume for each product of approximately 33% and 31%, respectively;
- Drove expanded adoption of Company products in hernia procedures with the launch of OviTex IHR Reinforced Tissue Matrix, specifically engineered for laparoscopic and robotic-assisted inguinal hernia repair, selling over 1,200 units in 2024 from its launch in mid-April 2024;
- Provided full year 2025 revenue guidance of $85.0 million to $88.0 million, representing 23% to 27% year-over-year growth.
"Our team delivered 19% revenue growth in 2024, and we saw multiple record-high sales months throughout the year. Our fourth quarter results fell short of our expectations due to a confluence of disruptions, some of which we believe are transient and others that have already been redressed. Despite these challenges, the overall opportunity for substantial value creation from current levels remains intact," said Antony Koblish, co-founder, President, and Chief Executive Officer of TELA Bio. "We believe our OviTex and OviTex PRS products remain well-positioned to benefit from several long-term tailwinds, most significantly an ongoing shift in the hernia repair market away from permanent synthetic mesh and increasing interest among surgeons in device alternatives to cadaveric tissue in plastic and reconstructive surgery. We are optimistic about TELA's outlook moving forward and believe we have taken necessary steps to drive additional market share capture in our primary indications, restore topline growth more consistent with our historical precedent, and continue our steady path towards profitability."
Fourth Quarter 2024 Financial Results
Revenue was $17.6 million in the fourth quarter of 2024, an increase of 4% compared to the same period in 2023. The increase was due to an increase in unit sales of our products resulting from the addition of new customers and growing international sales. This growth was partially offset by a decrease in average selling prices caused by product mix as the share of smaller-sized units increased following the introduction of robotically compatible OviTex IHR and our increased focus in growing market share in high-volume minimally invasive and robotic procedures.
Revenue was $69.3 million for the full year 2024, an increase of 19% compared to the same period in 2023. The increase was primarily due to an increase in unit sales of our products resulting from the addition of new customers and growing international sales. This growth was partially offset by a decrease in average selling prices caused by product mix as the share of smaller-sized units increased following the introduction of robotically compatible OviTex IHR and our increased focus in growing market share in high-volume minimally invasive and robotic procedures.
2025 Financial Guidance
- Full year 2025 revenue is projected to range from $85.0 million to $88.0 million, representing growth of 23% to 27% over full year 2024.
- First quarter 2025 revenue is projected to range from $17.0 million to $18.0 million, representing growth of 2% to 8% over the first quarter of 2024.
TELA share price down 24%
ASX ANNOUNCEMENT/MEDIA RELEASE
29 April 2025 AROA BIOSURGERY MARCH 2025 4C – COMMENTARY
FINANCIAL HIGHLIGHTS
• Second consecutive quarter of positive cash flows from operations, with NZ$1.1 million cash flow from operations for the quarter.
• Total cash on hand increased by NZ$0.1 million, ending the quarter with a strong cash balance of NZ$22.0 million.
• Strong cash receipts from customers of NZ$20.1 million for the quarter, in line with expectations.
• Net cash outflow from investing activities of NZ$0.6 million for the quarter, primarily reflecting routine capital expenditure.
• Full-year FY25 guidance is maintained at NZ$76-79 million total revenue (on a constant currency basis)1 and a normalised2 EBITDA profit of NZ$0-2 million.
• Full-year FY25 guidance is maintained at NZ$81-84 million total revenue (on a reported currency basis)3 (a 17-22% increase on FY24) and a normalised EBITDA profit of NZ$2-4 million.
https://stockhead.cmail19.com/t/d-l-sdkuljl-yupddjlly-h/
Insert from Wilsons latest
We maintain our OVERWEIGHT rating and $0.75/share PT on Aroa Biosurgery (ARX). Aroa has capped FY25 with a solid quarter for sales and cash flow. The wound care and reconstructive surgery category has endured some turbulence this year and remains cutthroat competitive. Aroa remains the pick of the group because it has two genuine category winners in OviTex and MYRIAD, looks likely to graduate into sustainable EBITDA creation and is in a growing net cash position. It is also too cheap. Although we set PTs with reference to sector multiples, our DCF-driven view on what the stock is ultimately worth drives recommendation, first and foremost. We understand why Aroa trades at the discount it does now; but should trade at a premium. With earnings growth, that transition point becomes more predictable. | Key
Tela Bio reported last night, stock looking to pop 14% when it opens. Not a huge improvement on the last quarter, but the cyclone effects should be behind them now. Focus more on their sales issues. One interesting comment regarding excess inventory and writeoffs of obsolete stock - who wears the cost ot that?Recent Highlights- Delivered revenue of $18.5 million in the first quarter 2025, representing growth of 12% over the prior year period and sequential growth of 5% over the fourth quarter of 2024;
- Increased demand for OviTex® and OviTex PRS Reinforced Tissue Matrix products during the first quarter, resulting in year-over-year revenue increase for each product of approximately 15% and 2%, respectively;
- Commenced full U.S. commercial launch of larger sized OviTex PRS for use in plastic and reconstructive surgery, which may reduce the need for multiple small pieces and have the potential to simplify more complex plastic and reconstructive procedures;
- Reiterated full year 2025 revenue guidance of $85.0 million to $88.0 million, representing 23% to 27% year-over-year growth.
"We are pleased with the strong performance in the first quarter of 2025 following the realignment and optimization of our sales organization," said Antony Koblish, President and CEO of TELA Bio. "The complementary dynamic between our Territory Managers and Account Specialists enabled new account wins and greater market penetration across our product portfolio. We are focused on carrying this momentum throughout 2025 as we aim to drive higher revenue growth and increased operating leverage and continue to drive towards profitability."
First Quarter 2025 Financial Results
Revenue was $18.5 million in the first quarter of 2025, an increase of 12% compared to the same period in 2024. The increase was due to an increase in unit sales of our hernia products resulting from the addition of new customers and growing international sales. This growth was partially offset by a decrease in average selling prices caused by product mix as the share of smaller-sized units increased following the introduction of robotically compatible OviTex IHR and our increased focus on growing market share in high-volume minimally invasive and robotic procedures.
2025 Financial Guidance Reiterated- Full year 2025 revenue is projected to range from $85.0 million to $88.0 million, representing growth of 23% to 27% over full year 2024.
- 2025 operating expenses are expected to be flat to 2024.
Seemed like a well received update as the SP jumped. Anyone still holding or solding?
I bought a very small parcel on the dip to 0.43 a few months back.
Maybe still some risk with the reseller in USA?
https://stockhead.com.au/health/aroa-rides-on-the-sheeps-back-with-maiden-profit-in-fy25/?utm_medium=email&utm_campaign=Lunchtime%20-05-28-2025&utm_content=httpsstockheadcomauhealtharoaridesonthesheepsbackwithmaidenprofitinfy25&utm_medium=email&utm_campaign=Lunch%20NL%20May%2029%202025&utm_content=Lunch%20NL%20May%2029%202025+CID_b4b74819e0e92903b710b71c40a068e0&utm_source=Campaign%20Monitor&utm_term=Aroa%20rides%20on%20the%20sheeps%20back%20with%20maiden%20profit%20in%20FY25
Quote from: Turkey on May 29, 2025, 04:47 PMSeemed like a well received update as the SP jumped. Anyone still holding or solding?
I bought a very small parcel on the dip to 0.43 a few months back.
Maybe still some risk with the reseller in USA?
https://stockhead.com.au/health/aroa-rides-on-the-sheeps-back-with-maiden-profit-in-fy25/?utm_medium=email&utm_campaign=Lunchtime%20-05-28-2025&utm_content=httpsstockheadcomauhealtharoaridesonthesheepsbackwithmaidenprofitinfy25&utm_medium=email&utm_campaign=Lunch%20NL%20May%2029%202025&utm_content=Lunch%20NL%20May%2029%202025+CID_b4b74819e0e92903b710b71c40a068e0&utm_source=Campaign%20Monitor&utm_term=Aroa%20rides%20on%20the%20sheeps%20back%20with%20maiden%20profit%20in%20FY25
Yes still holding. Yes plenty of risk with Tela Bio. First profit and hopefully just the start.
Interview with CEO post result
https://www.theaustralian.com.au/business/stockhead/content/long-shortz-with-aroa-biosurgery-arx-shears-first-profit-in-fy25/news-story/b416b8f805370266c7da441c7739aee4
Aroa is on the up.
https://www.theaustralian.com.au/business/stockhead/content/aroa-posts-third-consecutive-quarter-of-positive-net-cash-flow/news-story/07254d7584c655f54495d3e8bba46f77
Tela Bio appears to have failed at its 200 day MA and is drifting back down again. Whole industry is a bit on the nose in the US at the moment due to tariff threats. However, decent volume through last night, although the price move couldnt be sustained. I wouldnt be rushing in until an upwards direction is more established.
https://stockhead.cmail19.com/t/d-l-gdydljl-yupddjlly-p/
Aroa reconfirms FY26 guidance of NZ$92-100 million total revenue and normalised EBITDA of NZ$5-8 million
Aroa Biosurgery has reaffirmed its FY26 guidance, signalling that results are likely to land at the upper end of expectations as favourable changes to the US Medicare reimbursement framework strengthen the outlook for its Symphony and Myriad products.
Looks very encouraging and another NZ success storey.
Great result from Aroa above guidance. Good write up in Business desk.
https://www.google.com/url?q=https://businessdesk.co.nz/article/markets/aroas-winning-formula-from-sheep-guts-to-us-growth&sa=U&ved=2ahUKEwjVl_C24-mUAxWrRmwGHWS0NJYQxfQBKAB6BAgHEAE&usg=AOvVaw3hYbhiaTxAaKUcjxnJ1Pfb
Not far from hopefully entering All ords index.
Quote from: Shareguy on Jun 03, 2026, 12:09 PMGreat result from Aroa above guidance. Good write up in Business desk.
https://www.google.com/url?q=https://businessdesk.co.nz/article/markets/aroas-winning-formula-from-sheep-guts-to-us-growth&sa=U&ved=2ahUKEwjVl_C24-mUAxWrRmwGHWS0NJYQxfQBKAB6BAgHEAE&usg=AOvVaw3hYbhiaTxAaKUcjxnJ1Pfb
Not far from hopefully entering All ords index.
An NZ success story and not even dual listed on the NZX - boooooo
Here's a snippet of the article - they also are cashflow positive....
Aroa recently posted a stronger-than-expected result for the 2026 financial year, with revenue and earnings ahead of guidance. A standout in the numbers was the sales growth in its inpatient Myriad soft tissue products. A note from analysts at Bell Potter said the key positive in the numbers was Myriad, which grew 52% on a constant-currency basis compared to the prior year, driving top-line outperformance, including a record sales month in March. For the year to March 31, Aroa reported revenue rose 22% to $104m in constant currency, exceeding guidance of between $92m to $100m. Earnings before interest, taxation, depreciation and amortisation in constant currency were between $10m and $11m, a "strong beat" to the guidance range of $5m to $8m. Aroa was assisted by favourable foreign exchange, with a roughly $3m revenue tailwind versus constant currency, the analysts said.
They also scan as CHEAP ( DYOR of course )
And a bit from Forager Funds whom I follow occasionally
Forager Funds has maintained a strongly positive outlook on Aroa Biosurgery (ASX:ARX) throughout late 2025 and 2026, highlighting it as a standout contributor in its Australian Shares Fund.Forager views Aroa as a high-growth, quality small-cap medical stock that has safely transitioned into an exceptionally strong, self-funding financial position.Key Themes in Forager's CommentaryOperational Highlights and Breakout Growth: Forager explicitly cited Aroa's operational upgrades as a massive contributor to its portfolio's momentum. This culminated in May 2026 when Aroa blew past its guidance, delivering NZ$103.9 million in revenue and NZ$12.6 million in normalised EBITDA.The "Myriad" Catalyst: A focal point of investor enthusiasm has been Aroa's Myriad product line, which clocked a staggering 54% growth rate in 2026. Crucially, Forager and the broader market noted this was achieved without adding to the sales headcount, demonstrating massive structural operating leverage in the business model.Transition to "Self-Funding" Status: For fund managers like Forager, a key thesis metric has been cash security. Aroa generated NZ$5.1 million in positive net cash flow, wrapping up its financial year debt-free with NZ$27.1 million in cash and term deposits. This eliminates any near-term dilution risk, placing it among the structurally resilient small-caps Forager targets during macro market volatility.What Forager is Watching Next (FY27 Outlook)Reinvestment vs. Margin Expansion: Aroa guided NZ$115–125 million in revenue for FY27 (13–23% growth) but plans to proactively reinvest up to NZ$9 million into its commercial infrastructure and sales headcount. Fund managers will closely track whether this extra spending yields another wave of rapid market adoption.Capitalising on the Skin Substitute Market Reset: The company is positioning its Symphony product to aggressively win market share in the US following structural shifts in the wound care sector—a major milestone Forager and institutional investors are tracking to validate medium-term growth