The Somnomed Limited (ASX: SOM) share price closed 2.3% lower today at $2.12.
While the SomnoMed share price has bounced back 67.5% over the past half year, it still remains more than 11% down on this time last year. We take a closer look at what's been impacting the healthcare equipment company's share price.
2020 financial year highlights
The Somnomed AGM presentation from November 2020 draws attention to strong growth in the US and new sales leadership heading up Canada. New key appointments were also announced in Sydney.
Somnomed continued to promote the company's continuous open airway therapy (COAT) technology as a best-in-class treatment for sleep apnea. The company did not offer FY 2021 guidance in its latest report, due to uncertainties created by COVID-19.
Comparing FY19 to FY20, revenue was down 3% and earnings before interest, tax, depreciation and amortisation (EBITDA) took a 5% hit.
Commenting on the company's previous 12-month performance, CEO Neil Verdal-Austin said, "The past 12-months have been a mixed bag of, on the one side an incredible overall performance to March but on the other side, a dramatic and almost reverse of those fortunes in Q4 due to COVID-19."
Why did COVID-19 serve such a harsh blow to the Somnomed share price?
Unfortunately, there are a few middle-men between Somnomed and its customer base. A doctor needs to diagnose a condition, a dentist is then required to fit the COAT device.
During times of lockdowns caused by a global pandemic, people simply can't accommodate these types of services. That means sales go down.
From a $2.95 close on 20 February 2020 to 91 cents on 06 April 2020, it's very clear that the coronavirus had a fierce impact on the company's shares.
However, in more positive news, as we move into 2021 Morgans has retained a positive recommendation for Somnomed shares and has increased the target price to $2.55, up from $2.02.
