The PolyNovo Ltd (ASX: PNV) share price has continued its poor run on Monday.
In afternoon trade, the medical device company’s shares are down a further 1% to $1.36. This means the PolyNovo share price has lost almost two-thirds of its value in 2021.
This poor form has been driven by a weaker than expected performance in FY 2022 and the unceremonious exit of its CEO last month.
All in all, this has attracted high levels of short interest, making PolyNovo shares one of the most shorted on the Australian share market.
Where next for the PolyNovo share price?
While short sellers clearly believe the PolyNovo share price can go even lower from here, there is reason for shareholders to be a little optimistic.
According to a recent note out of Macquarie Group Ltd (ASX: MQG), its analysts are sticking with the company.
That note reveals that Macquarie has an outperform rating and $2.85 price target on the company’s shares.
Based on the current PolyNovo share price, this implies potential upside of greater than 100% for investors over the next 12 months.
Although Macquarie acknowledges that PolyNovo is underperforming its expectations so far in FY 2022, which has led to a sharp reduction in its earnings estimates, it remains positive on the future.
This is due to its belief that PolyNovo is well-positioned for growth over the medium to long term thanks to the NovoSorb product. Particularly as the company looks to expand its use into other areas such as the hernia repair and breast augmentation markets.
These are much larger opportunities than its current target market of dermal scaffolds (worth $1.5 billion per annum) and are estimated to be worth US$3 billion per annum each at present. Overall, this gives the company a $7.5 billion per annum market opportunity to grow into in the future if all goes to plan.
Though, judging by the PolyNovo share price performance, investors aren’t feeling overly confident about its prospects at this point. Time will tell whether short sellers or Macquarie made the right call.
The post PolyNovo (ASX:PNV) share price tipped to double in value appeared first on The Motley Fool Australia.
Should you invest $1,000 in PolyNovo right now?
Before you consider PolyNovo, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and PolyNovo wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
More reading
- These are the 10 most shorted ASX shares
- This fundie shorted Polynovo (ASX:PNV) shares in 2019. Here’s how much he would have made
- Why Appen, Cooper Energy, PolyNovo, and Sigma shares are falling
- These were the 5 worst performing ASX 200 shares in November
- Here’s why the PolyNovo (ASX:PNV) share price is attracting increased short interest
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended POLYNOVO FPO. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/3IVfikv
Leave a Reply