Nanosonics (ASX:NAN) share price tumbles despite guiding to strong growth at AGM

The Nanosonics Ltd (ASX: NAN) share price is tumbling lower on the day of its annual general meeting. At the …

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The Nanosonics Ltd (ASX: NAN) share price is tumbling lower on the day of its annual general meeting.

At the time of writing, the infection prevention company’s shares are down 5.5% to $5.77.

Key takeaways from the event

For investors that don’t have time to go through the company’s presentation, I thought I would pull out some key takeaways from the event.

Here are a few takeaways that could be of interest:

Double digit revenue growth in FY 2022

Nanosonics is expecting to deliver double digit revenue growth in FY 2022. This reflects its increasing global installed base and consumables usage across all regions, together with growth in EPR to Trophon2 upgrades. Management expects this to result in a gross profit margin greater than 75%. This assumes that positive market recovery trends continue.

Asia-Pacific and Europe and Middle East (EMEA) regions

Management sees significant opportunities for Nanosonics to grow its Trophon2 EPR footprint in the future. It estimates that there is a global addressable market of 140,000 units. This means it has only capture ~19% of its market at present. The main untapped markets are in the Asia-Pacific and EMEA regions. Management estimates that both markets have room for 40,000 units. This compares to 1,760 units and 1,510 units, respectively, at present.

New products coming

Nanosonics took investors through a couple of new products that have previously been announced to the market. This includes its AuditPro platform, which delivers a unique new digital workflow compliance management system for its Trophon2 EPR system. Management believes AuditPro further enhances the Trophon2 value proposition and competitive advantage. In addition, the company is aiming to launch the Nanosonics Coris endoscope cleaning system in 2023. It notes that more healthcare-associated outbreaks have been linked to contaminated endoscopes than to any other medical device.

Why is the Nanosonics share price falling?

There doesn’t appear to be an obvious reason for the weakness in the Nanosonics share price today.

However, there could be some disappointment that no further new products were announced. Management has been working on, and promising, a range of new products for a while now. But with no announcements made today, it appears as though they are still some way off from being ready commercially.

Should you invest $1,000 in Nanosonics right now?

Before you consider Nanosonics, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Nanosonics wasn't one of them.

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*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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