Polynovo: Market Appears Overly Optimistic on Commercial Rollout and Costs Required

No-moat Polynovo’s sales growth momentum is slowing markedly. Sales in April 2024 were AUD 9.2 million, with 74% stemming from its primary US market. Monthly sales increased 4.5% on November 2023 monthly sales, implying a CAGR of 11%. This compares with November 2023 monthly sales increasing 22% on May 2023, indicating a compound annual growth rate of 49%. With sales broadly tracking to our expectations, we maintain our full-year fiscal 2024 revenue forecast of AUD 100 million, implying 53% growth on last year. We keep our AUD 1 fair value and earnings estimates.