Tag: Stock pick

ASX small-cap stock Bubs Australia Ltd (ASX: BUB) shares are sliding on Friday after the infant nutrition company released a FY26 trading update.

At the time of writing, the Bubs share price is down 3.19% to 9.1 cents.

Today’s fall adds to a difficult recent run for shareholders. Bubs shares are now down around 17% over the past month and 34% in 2026.

The stock is also trading near the bottom of its 52-week range of 9.1 cents to 19 cents.

So, what has investors selling today?

Guidance points to more pressure

According to the release, Bubs now expects FY26 revenue of $105 million to $115 million.

The company said this still shows underlying growth, but the market appears more focused on the headwinds sitting behind the update.

Reported EBITDA is expected to land between a $2 million loss and a $2 million profit. Underlying EBITDA is expected to be between $4 million and $8 million.

Sales and earnings have been hit by several external factors.

Bubs pointed to evolving regulatory requirements, product availability constraints, geopolitical disruption in the Middle East, higher air freight use, and competitive pressures.

The company is still growing, but getting product into the right markets has become more expensive and complicated.

The US remains the key market

Demand for Bubs products remains in place, with the United States continuing to be its strongest growth market.

Chief executive Joe Coote said the company has taken a careful approach to managing its supply chain in a more complex external environment.

He noted that Bubs has been using air freight to support restocking in the United States. That extra cost is now winding down as the company continues to prioritise customer service.

Bubs said it remains on track to achieve ranging in more than 10,000 stores in July 2026.

Wider distribution in the US gives the company a bigger addressable market, but it also raises the pressure to execute well.

Foolish takeaway

Bubs remains a small-cap consumer stock with a market capitalisation of about $82 million.

That can make the share price sensitive to any change in expectations, especially when investors are already nervous.

The company has a strong brand in infant nutrition and exposure to large offshore markets, including the US and China. But today’s update shows growth is still coming with extra cost and operational risk.

The next test is whether Bubs can turn its wider US store footprint into stronger sales, while keeping a tighter hold on costs.

The post This ASX small-cap stock is sliding after a tough FY26 update appeared first on The Motley Fool Australia.

More reading

• Why are these 3 ASX 200 stocks crashing in this week’s rebounding market?
• 3 excellent ASX ETFs to watch in June
• ASX 200 storms higher as investors pile back into miners
• 9 ASX 200 shares with renewed buy ratings this week
• 5 ASX 200 shares downgraded by brokers this week

Motley Fool contributor Aaron Teboneras 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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a strong gain. At the time of writing, the benchmark index is up 1.2% to 8,698.3 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is down 6% to $4.49. This morning, Bell Potter responded to the iron ore producer’s results by retaining its hold rating with a reduced price target of $4.85. It said: “CIA expect to ramp-up high-grade concentrate (DRPF grade) production from mid2026. While we expect iron content price premiums for this product, full value-in-use premiums are unlikely to be realised until longer-term offtake is secured. Free cash flow should improve from FY27 as capex rolls off, supporting debt servicing and ongoing dividends. On valuation, we retain our Hold recommendation.”

IDP Education Ltd (ASX: IEL)

The IDP Education share price is down 15% to $2.25. This may have been driven by a broker note out of Macquarie. According to the note, the broker has downgraded the language testing and student placement company’s shares to an underperform rating (from neutral) with a reduced price target of $2.35 (from $5.45). The broker made the move on the belief that IDP Education could fall short of expectations partly due to weak student visa volumes.

Tuas Ltd (ASX: TUA)

The Tuas share price is down a further 1.5% to $2.06. Investors have been selling down this Singapore-based telco’s shares this week after it terminated its proposed S$1.4 billion acquisition of M1 Limited. Tuas made the move after authorities learned that its Simba business may have been using radio frequency bands it was not authorised to use. To fund the acquisition, Tuas undertook a A$416 million capital raising at $5.51 per new share.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside Energy share price is down over 1% to $30.29. Investors have been selling energy shares today amid news that the US and Iran are closing in on a deal to extend their ceasefire and reopen the Strait of Hormuz. If oil starts flowing through the strait again, it could put significant pressure on oil prices. The S&P/ASX 200 Energy index is down 1% at the time of writing.

The post Why Champion Iron, IDP Education, Tuas, and Woodside shares are dropping today appeared first on The Motley Fool Australia.

More reading

• After a 20% drop to a 12-month low, is it time to buy IDP Education shares?
• 3 ASX shares that could benefit most if the US-Iran peace deal holds
• 5 things to watch on the ASX 200 on Friday
• Is this ASX materials stock a buy, hold or sell after sliding on earnings results?
• Buy, hold, sell: Kingsgate, Metcash, Woodside shares

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. 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.

The S&P/ASX 200 Index (ASX: XJO) is ending the week in a positive session. In afternoon trade, the benchmark index is up 1.2% to 8,698.9 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are racing higher:

4DMedical Ltd (ASX: 4DX)

The 4DMedical share price is up 12% to $3.74. This follows news that the respiratory imaging technology provider has signed a commercial agreement with SimonMed Imaging. It is one of the leading outpatient medical imaging providers in the United States. 4DMedical’s CEO and founder, Andreas Fouras, said: “SimonMed is one of the largest and most influential outpatient imaging providers in the United States. Their decision to adopt CT:VQ, moving directly to commercial deployment, is a major milestone for 4DMedical and a strong validation of both our technology and our clinical value. In just months since FDA clearance, we have established CT:VQ across leading Academic Medical Centers and are now extending into large-scale imaging networks. This agreement demonstrates that adoption by world-class clinical innovators is translating directly into commercial uptake across high-volume providers.”

Elsight Ltd (ASX: ELS)

The Elsight share price is up 16% to $7.36. Investors have been buying the global enablement technologies provider’s shares after it received a major follow-on order. Elsight advised that a U.S. based commercial customer in the public safety sector has placed a follow-on order valued at approximately US$2 million (~A$2.8 million). The company’s CEO, Yoav Amitai, said: “A U.S Public safety customer increasing their order within months signals strong conviction, highlighting the Company’s operational validation and commercial traction. Public safety agencies are preparing for scaled BVLOS operations and selecting technology partners that meet the highest standards of reliability and compliance.”

Judo Capital Holdings Ltd (ASX: JDO)

The Judo Capital share price is up 12% to $1.56. This small business lender’s shares are lifting off today after it successfully priced a $750 million capital-relief securitisation transaction backed by small and medium enterprise (SME) business loans. It notes that following the transaction, Judo Capital will generate a significant net interest margin on the underlying business loans without needing to hold capital for these assets. Judo Capital’s CEO, Chris Bayliss, said: “We are very pleased with the strong support received for this transaction from a broad range of domestic and international investors. The transaction strengthens Judo’s CET1 position and increases our flexibility to support continued lending growth, while also improving ROE.”

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up over 4% to $19.01. Investors have been buying gold miners today after progress appeared to be made with US-Iran peace talks. This put pressure on oil prices, which has lowered interest rate hike expectations, boosting the allure of gold.

The post Why 4DMedical, Elsight, Judo Capital, and Northern Star shares are racing higher today appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 gold stocks like Northern Star, Evolution Mining and Newmont shares look like bargain buys now
• 4DMedical shares jump 11% as investors cheer major US agreement
• Which ASX 200 bank stock is jumping 12% on big news?
• Guess which ASX defence stock is rocketing 17% to a record high on Friday
• Judo upsizes $750m securitisation to boost capital and ROE

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. 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.

DroneShield Ltd (ASX: DRO) shares are lifting off today.

Shares in the S&P/ASX 200 Index (ASX: XJO) drone defence company closed yesterday trading for $3.19. In earlier trade on Friday, shares just jumped to $3.56, up 11.4%. After some likely profit taking, at time of writing shares are changing hands for $3.40 apiece, up 6.6%.

For some context, the ASX 200 is up 1.0% at this same time.

While stockholders have had to endure significant volatility this past year, those who stuck with it will have watched their DroneShield shares gain 163.6% over the last 12 months.

Here’s what may be helping lift the ASX 200 stock again today.

Why are DroneShield shares outperforming?

Russia’s ongoing war in Ukraine alongside the simmering Middle East conflict have spotlighted the rapid rise of drone warfare, and the accompanying need for drone defence systems.

Indeed, the latest United States defence budget contains a request for US$75 billion to fund drones and counter-drone technologies. And this is just one nation.

In the latest news that could be piquing investor interest in DroneShield shares today, Bloomberg reports that US President Donald Trump’s administration is looking into potentially helping fund domestic drone technology companies.

Talks between drone makers and the Federal government were said to be ongoing.

While DroneShield was not named among the companies that may get US government funding, the broader implications for the ASX 200 stock are bullish.

According to Needham & Co analyst Austin Bohlig (quoted by Bloomberg):

The growing focus on defence technology and autonomous systems reflects how rapidly modern warfare has evolved, with drones and low-cost autonomous platforms increasingly becoming central to future military operations.

Pointing to the strong global demand for drones, which could help DroneShield shares deliver another year of strong performance, Eric Sterner, chief investment officer at Apollon Wealth added, “Drones will continue to play an integral part of countries’ defence budgets for surveillance as well as for battle usage.”

What’s the latest from the ASX 200 drone defence stock?

DroneShield reported its March quarter (Q1 2026) results on 22 April.

Over the three months to 31 March, DroneShield reported revenue of $74.1 million, up 121% from Q1 2025. Customer cash receipts of $77.4 million were up 360% year on year.

With the company’s cash balance growing 13% to $222.8 million, and no debt, at quarter end, management said DroneShield is well-funded to pursue its ongoing growth plans. The ASX 200 stock recently added new regional manufacturing plants in Europe and the US.

Amid high market expectations, DroneShield shares closed up a modest 0.5% on the day of the results release.

The post Is this why DroneShield shares are rocketing another 11% today? appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. 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.

Trading in Dexus (ASX: DXS) shares has been paused on Friday as investors wait for more details on a court judgement involving its airport interests.

The Dexus share price is currently halted at $5.93.

That’s where the stock closed on Thursday after falling 1% for the session. It has also been a difficult year so far, with Dexus shares down around 14% in 2026.

The halt was requested before the market opened, with Dexus telling the ASX it was waiting on a Supreme Court of New South Wales judgement linked to proceedings involving the company.

Under the ASX notice, trading is expected to resume by Tuesday, 2 June, unless Dexus releases its announcement earlier.

So, what’s going on?

Court blow over Dexus’ airport interests

The issue relates to Dexus’ interest in Australia Pacific Airports Corporation (APAC), the owner of Melbourne Airport and Launceston Airport.

Dexus manages funds that own about 27% of APAC. Reuters reported last year that Dexus could be forced to divest the stake after APAC’s board alleged breaches of confidentiality agreements.

According to The Australian, Dexus has now lost its legal case and must sell the entire stake it controls in the airports.

The report said Dexus had taken action in the NSW Supreme Court to prevent being forced to sell out of the full stake.

The dispute followed an earlier attempt to sell a near 10% interest in the company that owns the airports.

The push to force a sale was driven by funds manager IFM, which is backed by major superannuation names including Australian Super, ART, Cbus, and UniSuper.

Other co-owners include the Future Fund, SAS Trustee, represented by NSW TCorp, and the Utilities of Australia vehicle managed by HRL Morrison and Co.

The Dexus-managed funds’ APAC interests have been reported as worth up to $4.5 billion.

Why investors are watching closely

This is a sensitive issue because Dexus is not just a landlord.

The company describes itself as a real asset group with a platform spanning listed property, funds management, infrastructure, alternatives, and other investments. Dexus says its wider platform manages a $51.5 billion Australasian real estate and infrastructure portfolio.

A forced sale of the APAC stake would therefore sit right at the centre of the group’s funds management and infrastructure ambitions.

It also comes at a time when the share price is already under pressure.

The stock has fallen over the past year and remains close to the lower end of its 52-week range. Dexus has traded between $5.82 and $7.73 over the past year, leaving the current halted price of $5.93 only slightly above that low.

The company has also been dealing with a difficult backdrop for listed property stocks, where higher rates and valuation pressure have weighed on investor confidence.

What comes next?

The next step is Dexus’ formal update to the market.

Investors will be looking for details on whether Dexus will appeal, how any sale process may work, and what the financial impact could be.

They will also want to know whether the ruling changes the outlook for management fees, fund relationships, or future infrastructure ambitions.

Until the announcement lands, the share price will remain frozen at $5.93.

The post This ASX stock is frozen after major airport court setback appeared first on The Motley Fool Australia.

More reading

• Why Champion Iron, IDP Education, Tuas, and Woodside shares are dropping today
• Why 4DMedical, Elsight, Judo Capital, and Northern Star shares are racing higher today
• Is this why DroneShield shares are rocketing another 11% today?
• Why are Electro Optic Systems shares up more than 10% today?
• How many Westpac shares do I need to buy for $10,000 of passive income?

Motley Fool contributor Aaron Teboneras 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.

Shares in counter-drone technology company Electro Optic Systems Holdings Ltd (ASX: EOS) were trading more than 10% higher on Friday morning after the company announced that two high-profile directors would join its board.

The company said in a statement to the ASX that Air Vice-Marshal (retired) Catherine Roberts and Major General (retired) Kathryn Toohey would join the board as Non-Executive Directors.

Depth of experience

EOS said Ms Roberts was a highly accomplished senior executive with “extensive experience at the highest levels of the Australian Defence Force and Government, applied across the Defence space and aviation sectors”.

The company added:

Catherine is recognised for her strong governance capability, innovation, strategic leadership, and extensive networks across Government, Defence, Industry, and Academia. She has worked extensively with Australia’s allies in North America, Europe and other countries. As the inaugural Commander of Defence Space Command in Australia, Catherine led the establishment and operational delivery of Australia’s military space capability. Her experience in space, aviation and weapons technology as an Aerospace Engineer spans 40 years. This has included Defence procurement, operations, complex project management and delivery of major programs valued at over $16 billion.

Ms Roberts’ other current board and advisory roles include Australia’s Economic Accelerator, Defence SA, Andy Thomas Space Foundation, and National Security and Resilience, Curtin University.

Ms Toohey, the company said, is an experienced Non-Executive Director with ASX and government experience.

The company added:

Kathryn brings deep expertise in sovereign defence capability, digital systems, infrastructure delivery, and governance of complex programs in highly regulated environments. Her experience includes oversight of major national capability programs as well as governance in national security environments.

Ms Toohey’s current board roles include: Austal Ltd (ASX: ASB), Australian Naval Infrastructure Pty Ltd, Defence Health Ltd, and the Australian Strategic Policy Institute Ltd.

EOS chair Garry Hounsell said the board had been very deliberate in selecting directors with the right mix of skills and experience.

He added:

I am delighted to welcome both Kathryn and Catherine to the Board of EOS. Their combined experience will be highly valuable as EOS continues to scale its global defence and space businesses and deliver on its strategic priorities.

Shares charging higher

EOS shares were 14.8% higher at $11 in early trade.

The shares have performed strongly in recent days, appreciating from levels below $9 just a week ago.

Bell Potter recently issued a price target of $10.60 on the shares, saying EOS was positioned as a market leader across a number of verticals and was leveraged to increased spending in the counter-unmanned aircraft systems sector.

The post Why are Electro Optic Systems shares up more than 10% today? appeared first on The Motley Fool Australia.

More reading

• Forget DroneShield and EOS, could this ASX 200 defence stock be one of the best to buy?
• Why EOS, Life360, Nufarm, and Web Travel shares are pushing higher today
• Up 400%+: Does Bell Potter think EOS shares can keep rising?
• The SpaceX IPO is coming. Here are 2 ways investors could benefit from the space boom
• 3 ASX shares that have doubled in the last year and could keep climbing

Motley Fool contributor Cameron England has positions in Electro Optic Systems. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. 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.

Owning Westpac Banking Corp (ASX: WBC) shares could be an appealing move for investors wanting passive income.

Westpac typically trades on a relatively low price-earnings (P/E) ratio and has a fairly generous dividend payout ratio, translating into a pleasing dividend yield.

The ASX bank share is forecast to continue delivering consistent dividends for the foreseeable future, which is a compelling attribute as an ASX dividend share.

As long as borrowers continue to repay their loans and Westpac attracts new loans, its financials could continue to be pleasing.

Dividend forecast

The bank is projected to deliver a pleasing level of dividend income to investors in FY26.

According to the projection on CMC Invest, the company is forecast to pay an FY26 annual dividend per share of $1.55. That translates into a forward grossed-up dividend yield of 6.1%, including franking credits, at the time of writing.

Pleasingly, Westpac is projected to increase its payout to $1.595 per share in FY27. Growth of around 3% is not exactly shooting the lights out, but I think any decent growth is pleasing in a very competitive industry. Macquarie Group Ltd (ASX: MQG) is working very hard at muscling in on the space.

How many Westpac shares are needed for $10,000 of passive income?

To receive that level of dividend income, we do need quite a substantial number of Westpac shares.

It depends on whether we want to include the franking credits or not as part of the income total. I think it counts because it’s included as part of our taxable income and they’re refundable tax credits. But I’ll show both numbers.

Excluding franking credits, based on the projected FY26 Westpac annual dividend per share of $1.55, an investor would require 6,452 Westpac shares to unlock $10,000 of passive income.

Including franking credits, an investor would only need 4,517 Westpac shares to generate that level of dividends.

Of course, with the fact that Westpac’s dividend is expected to rise to almost $1.60 per share in FY27, investors wouldn’t need as many Westpac shares to receive $10,000 of annual passive income next year.

Of course, I’d suggest investors get their dividends from a variety of sources, rather than just Westpac.

Is this a good time to invest in Westpac shares?

According to CMC Invest, of nine recent analyst ratings on the business within the business, the average price target is $34.33. That implies a possible mid-single-digit decline. Of those nine ratings, three are holds, and six are sells.

In other words, professional investors are not excited by the valuation at the moment. Therefore, I’d focus on other ASX shares that could be better buys.

The post How many Westpac shares do I need to buy for $10,000 of passive income? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: ANZ, Macquarie, Westpac shares
• This ASX bank ETF has a 5.2% dividend yield right now
• ASX 200 rises as inflation surprise leaves investors with one big question
• Westpac shares sink after court calls conduct ‘grossly negligent’
• Forget Westpac, these ASX dividend shares could be better buys

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

S&P/ASX 200 Index (ASX: XJO) gold stocks including Evolution Mining Ltd (ASX: EVN), Newmont Corp (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) shares have gotten walloped since the outbreak of the Middle East war.

Here’s what I mean.

Since the close of trade on 2 March – the first day of trading following the onset of the war – the ASX 200 has fallen 5.8%.

Here’s how these three top ASX 200 gold stocks have performed over this same period:

• Northern Star shares are down 40.3%
• Evolution Mining shares are down 31.5%
• Newmont shares are down 19.0%

Why have ASX 200 gold stocks been underperforming?

First, I should mention that Northern Star shares have taken a harder hit than most gold producers, primarily due to some recent full year production downgrades coupled with rising cost forecasts.

But all three ASX 200 gold stocks have been sold off amid a material retrace in the gold price.

Indeed, on 2 March gold was trading for US$5,322 per ounce. Three and a half weeks later, on 26 March, gold had plunged some 18% to US$4,376 per ounce.

The yellow metal has recovered some from those lows to be trading for US$4,519 today. But that’s still 15% below the levels it was trading at before the Iran war.

Why has the gold price plunged since the onset of the Iran war?

The declining gold price that’s pressured the likes of Northern Star, Evolution Mining and Newmont shares was puzzling to some investors, since gold is well known as a haven asset in times of uncertainty.

However, that haven status was overrun by the pressure gold faced as global energy prices rocketed, spurring inflation and investor concerns for higher interest rates ahead.

Gold, which pays no yield itself, tends to perform better in low or declining interest rate environments.

Emanuel Datt, founder of investment firm Datt Capital, noted that the gold price – and by connection ASX 200 gold stocks – also fell as some nations sold off part of their gold reserves.

“Gold is an asset class that has been sold off as countries such as Turkey have been liquidating gold reserves to be able to pay costs from higher energy prices,” Datt said (quoted by The Australian Financial Review).

But when, not if, a resolution is reached and the Strait of Hormuz reopens, oil prices should come down quickly. This in turn will ease global inflationary pressures, and central banks need to hike interest rates.

“The time pressure is weighing on both sides of the war, but I think that we’re getting closer to a deal,” Datt said.

Atop of Newmont and Northern Star shares, Datt also believes Vault Minerals Ltd (ASX: VAU) and Ramelius Resources Ltd (ASX: RMS) are well-placed to rebound.

ASX 200 gold stocks jumping on new truce hopes

This morning, investors learned that US and Iranian negotiators had agreed to a 60-day truce. A deal that’s still awaiting US President Donald Trump’s approval.

For some idea of the potential rebound on offer from ASX 200 gold stocks should the truce take hold and lead to a definitive end of the conflict, here’s how these top Aussie gold miners are tracking today on the mere hopes of a pause:

• Northern Star shares are up 4.5%
• Ramelius Resources shares are up 3.5%
• Vault Minerals shares are up 3.6%
• Evolution Mining shares are up 4.0%
• Newmont shares are up 4.0%

The post Why ASX 200 gold stocks like Northern Star, Evolution Mining and Newmont shares look like bargain buys now appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 6 ASX 200 shares just upgraded by the experts
• Why Eagers Automative, Endeavour, IPH, and Newmont shares are sinking today
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bernd Struben 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.

4DMedical Ltd (ASX: 4DX) shares are rocketing on Friday after the medical imaging tech company announced a new US commercial agreement.

At the time of writing, the 4DMedical share price is up more than 11% to $3.72.

The latest gain gives shareholders some relief after a rough few weeks. The stock is still down about 21% over the past month, but it remains one of the top performers across the ASX.

Over the past year, 4DMedical shares are up 960%.

Let’s take a closer look at the release.

A major US imaging deal

4DMedical announced that its CT:VQ technology has entered the US outpatient market through a commercial agreement with SimonMed Imaging.

SimonMed operates more than 170 outpatient imaging centres across the United States.

According to 4DMedical, the agreement allows immediate clinical deployment of CT:VQ and Lung Density Analysis (LDA) on commercial terms from day one.

SimonMed is one of the largest physician-led imaging providers in the US. It operates across 10 states and is supported by more than 300 radiologists.

4DMedical said the agreement gives it access to a large community-based imaging network beyond hospital and academic settings.

What CT:VQ actually does

CT:VQ is 4DMedical’s software-based lung imaging product.

It uses existing CT scans to help doctors assess how air and blood move through the lungs.

4DMedical says the technology can support clinical decisions in areas such as pulmonary embolism, lung disease, and treatment planning.

One of the attractions is that it works with standard CT imaging infrastructure. This means imaging providers don’t need to buy major new hardware before using the software.

The US reimbursement angle is also worth watching. 4DMedical said the SimonMed agreement will support the development of reimbursement evidence and data across its network.

This gives 4DMedical another way to build clinical use while also gathering the data needed to support payment pathways.

Foolish bottom line

4DMedical said the announcement is not immediately financially material.

But investors appear to be looking past the near-term revenue impact and focusing on what the agreement could mean for wider US adoption.

The agreement runs for 3 years, with pricing based on per-scan rates. Under that structure, 4DMedical is paid as the technology is used, instead of a one-off sale.

The size and type of customer are also doing some of the work here. SimonMed gives 4DMedical exposure to a large outpatient footprint, where scans are performed closer to everyday patient care.

The post 4DMedical shares jump 11% as investors cheer major US agreement appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why did 4DMedical shares charge higher today, then drop?
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Aaron Teboneras 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.

Shares in IDP Education Ltd (ASX: IEL) were getting hammered on Friday morning after Macquarie downgraded the company to an underperform rating.

IDP Education shares fell well below Macquarie’s own price target of $2.35, dropping 20.3% on heavier than usual volume to be changing hands for $2.12, after hitting a new 12-month low of $2.08. The shares have traded as high as $7.97 during the past 12 months.

Difficulties lie ahead

Macquarie said there were numerous headwinds for the company including a stronger Australian dollar, weaker visa volumes across Australia, the UK, and Canada, and soft demand signals for English education as evidenced by lower Google searches for the IELTS test across India and China.

IELTS is the dominant test used to evaluate English proficiency.

Macquarie added:

While the China IELTS rollout is progressing well, with test centres rising to 13 across 9 provinces, this is insufficient to offset broader weakness. Further, while we expect IEL could announce additional cost-out in response to topline pressures, we estimate IEL would be required to achieve additional $25m net cost reduction on top of the $25m already announced for FY26E to reach Consensus FY27 EBIT. We view this as challenging given lower-hanging cost-out opportunities (e.g., project spend) have already been captured.

Macquarie said there was a risk of further downside in FY26 and downgrades to the outlook for FY27.

They added:

While our FY26 EBIT of $120.0m is at the bottom-end of FY26 guidance of $120-130m, we see downside risk here due to foreign exchange headwinds and given our volume estimates are more optimistic than current indicators imply. We see significant downside risk to FY27.

The Macquarie price target was cut by more than half, down from $5.45 previously to $2.35.

They added:

While we view IEL’s long-term thesis to be intact, as both foreign student demand should return, and policy setting should improve given university and population growth reliance on students, we see near-term earnings headwinds.

Company outlook positive

IDP has not made any comment regarding its business outlook since the release of its first-half results in February, when it upgraded its full-year guidance from EBIT of $115 to $125 million to $120 to $130 million.

Managing Director Tennealle O’Shannessy said at the time the company was pleased with the first-half performance, “with the team executing well across the business whilst also progressing our transformation program at pace”.

IDP Education is valued at $740.4 million.

The post After a 20% drop to a 12-month low, is it time to buy IDP Education shares? 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.