Pareto Securities expects a double-digit decline for surgical simulator company Surgical Science after customer Intuitive terminated its letter of intent to integrate the company’s simulation software into all da Vinci 5 (dV5) robotic systems.
According to Surgical Science, this will result in a negative impact on licensing revenue of SEK 60-90 million next year.
In light of this announcement, Pareto has revised down its licensing estimates by 20 percent, and lowered next year’s revenue and operating profit forecasts by 12 and 50 percent, respectively.
This leads to both a lowered recommendation to hold (buy) and a lower target price of SEK 75 (130).
“Although the share price has already been weak in recent weeks, we expect the share to decline by double digits today,” the research house writes.
Growing licence sales have been key to our investment thesis, driving both top-line and margin expansion. As this announcement significantly affects our estimates, it also has a marked effect on our valuation. Specifically, we lower our base case from SEK174 to SEK118. Similarly, our valuation range drops from SEK66-311 to SEK45-189 per share. While the share is already rather depressed, we expect these latest news to elicit a significant negative reaction. We will contemplate further adjustments to our estimates and valuation after the company’s capital markets day.
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On tämäkin eräänlainen vuosi. Noh RE Top Picks taisi lisätä tätä juuri viime viikon lopulla tms.