Medistim ASA - health technology for the operating room

[Niinpaljonturskaa]

Opening a thread and discussion about an interesting health technology company on the Oslo Stock Exchange. Are there any Medistim investors on the forum?

Medistim ASA is a Norwegian listed company that develops, manufactures, and distributes medical devices primarily for cardiovascular surgery needs.

Medistim’s own products are considered the standard of care in most European countries and Japan, while market entry is only just beginning and growing in the United States, Asia, and the Middle East. Medistim is a market leader in intraoperative transit time flow measurement (TTFM) and ultrasound imaging. These systems allow medical professionals to reduce the risk of intraoperative complications during cardiac, vascular, and transplant surgeries. They provide clinically relevant information that enables surgeons to make better decisions in the operating room. The company’s devices are developed in close cooperation with surgeons.

The small company is on a strong growth path. 2021 figures:

• Revenue 427 MNOK, Growth 17.7% (currency adjusted 24.6%)
• Operating profit 90.9 MNOK EBIT, Growth 21.8%
  Sales of own products grew by 26%, of which sales of imaging portfolio products grew by 29% and vascular portfolio by 21%.

Share valuation on 4.4.2022 at a price of 285NOK PE: 57 with realized 2021 results

The company has room to grow globally. The company’s products are standard and market leaders in several European countries, but there is plenty of room for growth in, for example, the United States and emerging markets. For example, in India, the company holds an estimated only 1% market share. In the United States, the market share is approximately 28% and sales grew by 28% in USD terms in 2021.

Source: www.medistim.com

Excerpts from the 2021 annual report:

Revenue and operating profit:

The company’s goal is to maximize shareholder value creation. Dividends are paid when consistent with the growth strategy and financial objectives. In practice, the dividend has grown strongly:

Market shares:

Share price:

Ownership base:

[An147]

Interesting company. I opened a monitoring position in early March when the stock, like other growth companies, slid down from its peaks of over 400 NOK around the turn of the year.

Impressive growth and operations. The end of the COVID-19 pandemic will further accelerate growth as the accumulated backlog of surgeries is addressed.

[Niinpaljonturskaa]

Q4 and 2022 results out

Company Disclosures: Medistim's Transparency & Corporate Governance

"Another record quarter ending at MNOK 141.8 in sales (MNOK 112.7). Full year revenue at MNOK 491.9 (MNOK 427.3) is also a new record, up 15.1 %.

Sales growth is driven by all major geographical regions. Currency neutral sales increase by 21.6 % for the quarter and 11.9 % for the year.

Currency neutral sales of own products increase 24.6 % for the quarter and 14.0 % for the year.

The Vascular business segment grows at 8.8 % for the quarter and 27.3 % for the year.

The Imaging products grows at 33.5 % for the quarter and 44.0 % for the year.

Operating profit (EBIT) for the quarter ended at MNOK 36.5 (MNOK 19.5), with an EBIT margin of 25.7 % (17.3 %). For the year, EBIT ended at MNOK 141.3 (MNOK 116.3), with an EBIT margin of 28.7 % (27.6 %).

The board suggests a dividend of NOK 4.5 (NOK 3.75) per share to the General meeting, a total dividend payout of MNOK 82.1."

[Sijoittaja-alokas]

Medistim’s stock has fallen from previous high valuation levels, which, according to the tweeter, makes the risk-reward ratio attractive.

The company invests in innovations that apparently strengthen its competitive advantage. Strong cash flow, high margin, and dividend yield make it a stable long-term investment, according to the tweet.

https://x.com/olensrud/status/1903321296320045322

---

Here are the company’s Q4 materials.

[Thyme]

It would be nice to hear comments from other esteemed forum members about this company as well.

How does this sound:

• 80% gross margins
• Over 30% ROIC
• Strong balance sheet
• Cash flows into the coffers
• Niche area of expertise
• Market leader in some areas

Quality company?

Perhaps on the negative side, I see that the equipment to be invested in is quite expensive, meaning sales volumes are relatively small in terms of units.

EPS has been stagnant for a couple of years. But has it started to grow now?

The valuation doesn’t seem bad, although six months ago this could have been acquired at a very reasonable price.

[Tyhjatasku]

Medistim has been in the portfolio since the beginning of the year and has been mentioned in previous portfolio reviews

Mitä sinulla on salkussa?

Viimeinenkin salkkuyhtiö on julkaissut kvartaaliraporttinsa ja on taas aika kurkistaa salkkuun . Tämä siirtymäjakso Puuilon ja Admicomin raporttien välillä on hiuksen hieno, mutta hyvä hetki reflektoida edellistä kvartaalia. Salkunrakennus on jatkunut, taisin viime kvartaaliraportissa kirjoittaa, kuinka mielenkiintoni on monen asian summana siirtynyt kotimaisista yhtiöistä kohti kansainvälisiä yhtiöitä. Olen näköjään haluamatta kontraaja, koska Hesuli on ollut vahvassa vedoss…

@Tyhjatasku

Medistim published a very strong Q1 result. In the conference call, the company even tempered investors’ expectations, stating that this was an exceptionally strong quarter and such results should not be expected consistently. The company performed excellently in every area, which creates confidence that the company’s products are high-quality and competitive.
A slight concern arises in me regarding the possibility of some anticipatory demand in the medtech sector due to tariffs. Such strong results were seen in Q1. However, companies in the sector widely spoke about the normalization of demand, so it will be interesting to see how Q2 results turn out.

@Tyhjatasku

Medistim

Medistim’s Q2 result surprised positively again. Revenue grew by over 16%, but EBIT improved by as much as 31%.

At the same time, we see that the share of recurring sales has started to decrease, while the share of equipment sales (as fully desired) has grown, which lays the foundation for future recurring revenue. ROIC has returned to over 40%.

What I believe makes the company very attractive is its recurring revenue. The company sells sensors that can be used 50-100 times depending on the sensor, after which they need to be replaced. Currently, recurring revenue varies between 65-75% of total revenue. Ideally, it would fall below 60%, which in a good scenario would mean that equipment sales are increasing.
It’s also good to note that revenue comes from leased devices sold on a per-operation basis, and Medistim also acts as a distributor in Scandinavia. So the breakdown is not purely equipment / sensor sales.

The company also has two different types of products: flow measurement and imaging. As I understand it, the products are modular, and often a customer might start by purchasing the flow function and later add imaging. In addition, the company has introduced new software to support decision-making in the operating room, which I believe increases competitive advantage and pricing power. This way, they have also been able to tackle the high price, meaning it can be purchased in parts or a leasing agreement can be made.

In Q2, an interesting point about M&A was also raised. Management sees better potential in organic growth, for example, by moving to direct sales instead of using a partner.

And there seem to be quite good plans for organic growth.

The company has a 37% market share in cardiac, but there is significant potential for growth in vascular.

I am attracted by the company’s pricing power and strong market position. So far, I believe management has navigated the company well, even through a somewhat challenging period, from which there are now indications of recovery.

A few good articles about the company:

Medistim

Medistim (MEDI): A Heart Surgeon’s Best Friend

[Tyhjatasku]

Medistim published its Q3 results yesterday. There was a bit of excitement on my part, as the company had promised to raise prices with new product features and to mitigate the impact of tariffs. I wondered what effects this would have on demand and if the company’s pricing power was as strong as I had believed.

Financial Reports & Presentations: Medistim's Investment Insights

Revenue grew by over 25% and EBIT grew by 27%. EBIT margin 24.3%. The EBIT margin did, of course, drop from the Q1-Q2 peak margins, which was primarily due to performance-based bonuses and commissions paid by the company. These were questioned quite a lot in the earnings call, and management commented that the increased costs are also a sign that targets have been met.

Recurring revenue decreased slightly below 70%, which I still consider a good sign, as it indicates that more devices are being delivered, which will bring recurring revenue in the future.

As we can see, in 2024, recurring revenue strongly increased its relative share when equipment sales were softer.
Revenue growth was distributed such that EMEA was soft and contracted, whereas Americas grew by approximately 35% and APAC by as much as 193%. Regarding Asian sales, it’s good to note that sales in the comparative period were weak, as there were no sales in Japan at all and a distributor was changed in China, hence the large percentage change. On the other hand, if APAC continues even moderate growth, its importance to Medistim will be greater than EMEA in the coming years.
The strong growth in USA + rest of Americas sales was a pleasant surprise. Could it also indicate good news for other medtech companies dependent on USA sales? However, management commented that quarterly fluctuations are significant and orders can shift between quarters, so it’s certainly better to follow the bigger picture.

On the product side, it was pleasing to see that sales of imaging devices, in particular, have grown significantly. These are higher-priced products and, as I understand it, are purchased modularly, so a customer might first buy a flow module and later purchase an imaging device.
A minor flaw in the report was that growth primarily came from the Cardiac segment, where the company has an almost monopolistic position. Vascular is a future growth driver from which the company seeks future growth, but competition is tougher. Earlier in the year, Vascular grew very strongly, but Q3 was softer. In the conference call, it was stated that this is normal quarterly fluctuation, but this remains to be seen.

All in all, a pretty good quarter; it remains to be seen how EMEA and Vascular sales develop in future quarters and if topline growth remains as strong.

[Thyme]

Go ahead and submit your own forecasts for this company.

Medistim - Inderes

[Tyhjatasku]

Medistim reported Q4 results yesterday, Friday, and the results clearly exceeded market expectations.

Revenue grew by over 20% and EBIT improved by as much as 64% YoY.

Growth was driven especially by sales in the Americas, where the company had a difficult couple of years. APAC was a small disappointment, but this is likely explained by timing. The equipment delivered is expensive, so the recording of orders across different quarters can cause fluctuations in the results. It is also good to keep in mind that this quarter’s strong result should not be taken as a definite indication that growth will necessarily continue as strongly, but it is a good signal of the company’s performance nonetheless.

Equipment sales were strong in Q4, which caused the share of recurring revenue in total sales to dip. This is a desired development, as equipment sales drive future recurring sales.

During the year, the company launched new software sold as an add-on alongside the equipment. This is intended to increase the margin per device. The company also raised prices to offset costs caused by tariffs.

The company’s return on capital has turned into a strong upward trend, as NOPAT improved by nearly 50% from last year. NOPAT stagnated for a couple of years, but 2025 was a clear leap in earnings. The company calculates ROIC excluding cash and cash equivalents.

It was also pleasing to note that growth occurred in both imaging and flow products. Devices are often sold modularly, where a customer might first buy “flow” and later add a more expensive imaging module.

Another important thing is to monitor how Cardiac/Vascular sells. Medistim is the market leader on the Cardiac side, but Vascular is a large potential market. Therefore, success in Vascular would be very important for future growth.

Overall, a very successful quarter. It would be desirable for the development to continue as strongly, but this naturally requires continuous investment in products and the strengthening of the sales team. The company also announced during the previous quarter that it is opening a direct sales channel in Japan.