This ASX health tech stock just hit a new record high. Could it go even higher?

Shares in medical technology company Echo IQ Ltd (ASX: EIQ) hit a record high of $1.25 in early trade on Friday, but according to the team at Morgans, there’s potential for them to surge even higher.

Key new technology

So what does the company do?

EchoIQ has developed a technology it calls EchoSolv HF, which is software which allows clinicians to identify patients with heart failure using data from echocardiograms.

The company last month said it had struck an agreement with the Mayo Clinic in the US, which paved the way for the technology to be rolled out once it was approved by the US Food and Drug Administration.

As the company said at the time, the agreement with the Mayo Clinic followed a collaboration between the two organisations.

The expanded agreement follows a validation study conducted through the Mayo Clinic Platform validation program. The study met its primary endpoint, with EchoSolv HF demonstrating a sensitivity of 99.5% in identifying patients with heart failure and a specificity of 91.1% in correctly identifying patients without heart failure. These results have not been reviewed or cleared by the FDA and are subject to the FDA’s regulatory review process. Following this study, the Company lodged its market clearance application for EchoSolv HF with the FDA via the 510(k) premarket notification pathway. The Company advises that it is currently progressing through the FDA review process and will provide additional updates as developments materialise.

The company said the clearance had the potential to unlock a significant market opportunity, with heart failure a “substantial and growing burden on the US healthcare system”.

Share price upside remains

EchoIQ shares have appreciated substantially over the past year as the company has progressed its technology, improving from a low of 16.5 cents to be trading at a year-high of $1.25 today.

This is close to the Morgans target price of $1.30, but the analyst team at Morgans have flagged there’s further significant upside possible following FDA approval.

As they said:

We initiate coverage with a Speculative Buy rating and $1.30 price target with potential upside to $1.68 on approval/reimbursement, underpinned by near‑term FDA clearance, reimbursement progression, and a credible pathway to US commercial scaling. We expect a positive outcome from the EchoSolv HF FDA 510(k), due imminently, which unlocks the large, structurally undiagnosed US cardiac market. Combined with attractive unit economics and clear patient and hospital benefits, we see a high probability of rapid US adoption and monetisation.

Echo IQ was valued at $759.9 million at the close of trade on Thursday.

The post This ASX health tech stock just hit a new record high. Could it go even higher? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.