Revenue growth of 25,8% CAGR from 2018 to 2023 due to aggressive international expansion. The company is expected to grow at a CAGR of 25,8% in the coming years from 2018 to 2023. The sales growth of the company will come through international expansion, and closer ties with core partners and an increasing MRI market. The market grows at an average of 7% each year, and the company will continue to take market share, currently at a low 0,05%. But since the sales will grow faster than the market, it can increase to 0,1% by 2023. The EBIT-margin and profit margin will increase since the significant investments in expansion is behind them, from 36,2% in 2018 to 57,5% in 2023 and 28,3% to 45,1% respectively. The costs will continue to grow, but at a slower pace relative to sales.

Closer ties with market leaders. The company operates in a highly concentrated market, where three major players control close to 70% of the total MRI-market share, these are GE Healthcare, Siemens Healtineers, and Philips Healthcare. Synthetic MR cooperates with all of these companies and sells their products on license through them, so they can penetrate new markets. Currently, the company’s product is protected by patents and first mover advantage, since getting FDA approvals take years to get, which in turn works like a moat. The company focus a lot on maintaining these relationships and further the cooperation. This will be a catalyst for growth, especially in emerging markets such as China.

Peer valuation signals bullish market expectations. At the moment the relative peer valuation of the company gives it at an optimistic view of the future earnings potential with a P/E ratio of 90,4 compared to the market average of 47,8 of comparable MedTech companies. The DCF-analysis, in comparison, gives a fair value that is 6% lower than the current trading price. This metric provides a negative view of the current valuation. Even though SyntethicMR has a lot of revenue potential the market values the future earnings high, which makes it a risky company.

Analyst: Markus Ljunggren