Has Volpara Health Technologies Limited remained resilient?

Team Veye | 09 Apr 2020 ASX - VHT
Has Volpara Health Technologies Limited remained resilient?

Volpara Health Technologies Limited (ASX: VHT)

Volpara Business Update

Volpara Health Technologies Limited (Volpara; ASX: VHT), a medical technology company whose cancer screening software platform assists in the delivery of personalised patient care, on 7 April 2020 provided a business update on FY2020, which ended 31 March 2020 against the backdrop of the global COVID-19 situation.

(Chart source: TradingView)

Highlights:

  • The Company recorded Annual Recurring Revenue of NZ$18M, beating its already upgraded target for FY2020 of NZ$17.8M (up 172% y-o-y) 
  • The Company now estimates it has at least one software product being used in the screening of ~27.1% of US women for breast cancer, meeting its target for FY2020 
  • The Company retains over NZ$31M in the bank, with no debt 
  • The Company is selling SaaS into enterprise health systems; COVID-19 will affect the business in FY2021, but the exact quantum remains to be seen 
  • The Company is continuing to invest in its stated strategy as fundamentals for business are sound 
  • Prudent measures are being taken on operating expenses (Data Source – Company Reports)

 

Veye’s Take

Despite COVID-19, Volpara Health managed to have a very strong Q4, and closed out FY2020, meeting and exceeding its targets, including an increase in ARR of 172%, which includes a contribution from the MRS acquisition. Volpara Health is a very virtual and resilient company from the start due to its location in New Zealand. The company’s ability to work from home, proven cloud-based products and outstanding US sales team have all helped beat the targets. The Company holds over NZ$31M in the bank, with no debt. It is taking prudent measures on operating expenses. The stock has completed an inverse head & shoulder pattern. It could face resistance around the $1.42 area. If it manages to clear this with volumes then it can have the potential of resuming a long term uptrend to reach earlier highs. We maintain a “Hold” recommendation on “Volpara Health Technologies Limited” at the current price of $1.29

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