Clinuvel Earnings: Disappointing Revenue Growth, but Shares Remain Undervalued

No-moat Clinuvel’s first-half fiscal 2024 sales growth moderated to a low 4% constant-currency revenue growth versus 19% constant-currency revenue growth in the previous corresponding period. Sales-growth volatility was partly because orders from larger treatment centers in Europe were recognized earlier in the 2023 calendar year. Despite that, we reduced our forecast five-year group revenue compound annual growth rate to 11% from 13% because we think demand for Scenesse is slowing more than we expected. However, the valuation impact was largely offset by the time value of money, reduced forecast investment in working capital, and performance rights lapsing in November 2023. We maintain our AUD 18 fair value estimate with shares remaining undervalued.