Top broker says this ASX small-cap healthcare stock could be set to double

ASX healthcare stocks were among the worst performing over the last year. 

In fact, the S&P/ASX 200 Health Care (ASX:XHJ) index is down more than 24% over the last 12 months. 

For context, the S&P/ASX 200 Index (ASX: XJO) is up 7.5% in that same span. 

One of the many healthcare stocks have stumbled in the last year is EBR Systems Inc. (ASX: EBR). 

Its share price has fallen by 20% in that time.

However it has drawn an attractive buy recommendation and valuation from the team at Morgans. 

Let’s find out what’s behind the positive outlook. 

Introducing EBR Systems

EBR Systems is a medical technology company that develops innovative, implantable cardiac pacing devices designed to treat cardiac rhythm diseases, especially heart failure.

Its’ key technology is the Wireless Stimulation Endocardially (WiSE) technology, which was developed to eliminate the need for cardiac pacing leads.

Back in December, the company made headlines due to successfully implanting the first patient in a key clinical trial.

The company behind this healthcare stock said:

The initial product is designed to eliminate the need for coronary sinus leads to stimulate the left ventricle in heart failure patients requiring Cardiac Resynchronisation Therapy (CRT). Future products potentially address wireless endocardial stimulation for bradycardia and other non-cardiac indications.

Commercial and Clinical Progress

In its Q4 announcement released on Monday, the company said the WiSE System was implanted in 18 commercial patients during Q4 2025, doubling the number performed in Q3 2025.

The company also said it expects to report revenue in the range of US$870K and US$935K for Q4 2025, and total 2025 revenue in the range of US$1,552K and $1,617K, based on preliminary unaudited year-end results and subject to yearend closing adjustments. 

John McCutcheon, EBR Systems’ President & Chief Executive Officer said:

In Q4 2025, we continued to make solid progress across both our commercial and clinical programs. Case volumes increased meaningfully, reflecting growing physician experience and expanding site readiness. Additionally, we advanced important clinical initiatives, including the commencement of the WiSE-UP post-approval study and the first patient enrolled and implanted in the TLC-AU feasibility study.

What’s Morgans’ view?

In a note out of Morgans yesterday, the broker said 4Q25 delivered a clear step-up in commercial execution, with case volumes doubling q/q and revenue materially ahead of expectations, confirming accelerating physician uptake during the Limited Market Release (LMR). 

Preliminary 4Q revenue of US$0.87-0.94m exceeded its estimate by c60%, with FY25 revenue of US$1.55-1.62m validating early pricing and demand assumptions. 

We view clinical momentum with the WiSE-UP post-approval study and the TLC-AU feasibility study as supporting longer-term adoption and label expansion. Updated TAM of US$5.8bn (+60%) highlights a materially larger opportunity, underpinned by growth in leadless pacing and de novo CRT applications.

The broker has adjusted CY25-27 forecasts, with its DCF-based valuation increasing to $2.95. 

This updated price target indicates an upside of more than 180% from yesterday’s closing price of $1.05. 

The post Top broker says this ASX small-cap healthcare stock could be set to double appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.