The Polynovo Ltd (ASX: PNV) share price has been the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.
At the time of writing, the medical device company's shares are down 6% to $2.16.
This leaves the PolyNovo share price trading within sight of its 52-week low of $1.98.
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Why is the PolyNovo share price is tumbling?
Investors have been selling down the PolyNovo share price after analysts at Bell Potter responded negatively to yesterday's sales update.
According to the note, the broker has held firm with its hold rating but cut its price target down to $2.65.
Bell Potter made the move after the company's sales update fell short of its expectations. PolyNovo reported product revenue growth of 34% in FY 2021 to ~$25.6 million, whereas Bell Potter was expecting $29.1 million.
What did Bell Potter say?
Bell Potter notes that PolyNovo has now fallen short of expectations for two consecutive halves.
It commented: "Today's announcement came as a 13% miss vs our expectations—we expected COVID recovery tailwinds would make an impact on sales in the 2H. Although we view the quantum of sales growth as positive and acceptable, much loftier market expectations have not been met this and last half, which has contributed to recent downward pressure on the stock."
In light of this, the broker has revised its revenue forecasts lower and adjusted its target on the PolyNovo share price accordingly.
The broker concluded: "Maintaining our HOLD rating with a reduced price target of $2.65/sh (from $2.75/share) on reduced FY22-24 revenue forecasts. PNV continues to trade at a significant premium to domestic and international wound care and MedTech peers."
Bell Potter suggests that investors wait for PolyNovo's "full year result in late August for additional detail, especially around new account additions, momentum with group purchasing organizations, and audited revenue figures."
