The Polynovo Ltd (ASX: PNV) share price has been on a trending decline over the past 12 months. This is despite the company recording strong sales growth throughout the year due to its ever-expanding presence across geographical markets.
In 2021, the medical device company's shares fell around 60% in value. In comparison, the S&P/ASX 200 Healthcare (ASX: XHJ) sector has gained almost 10% over the same time frame.
However, Polynovo shares have made a positive start for 2022. In the first trading day of the new year, its shares finished up 2.3% to $1.56.
What happened with the Polynovo share price?
Investors heavily sold off Polynovo shares last year due to challenging market conditions caused by COVID-19.
Although the company reported surging sales volumes across global markets, it missed the mark on investor expectations. This is mainly related to the underperformance in the United Kingdom, Ireland, and Europe markets.
Last month, Polynovo advised a number of initiatives are being undertaken to improve the effectiveness of its in-market programmes.
Another factor which caused Polynovo shares to slide was the shock exit of its CEO in early November. After seven years with the company, outgoing managing director Paul Brennan decided to resign from his post.
Investors took the news negatively, sending Polynovo shares down 13% within two trading days.
Polynovo noted it's still conducting its international search to find a new CEO, with significant interest from candidates globally. It expects that the role will be filled sometime within the first quarter of 2022.
Furthermore, short-sellers weighed down Polynovo shares in 2021 following a report from the Australian Securities & Investments Commission (ASIC) last month. The government body noted that around 7.4% of Polynovo shares were being shorted.
What do the brokers think?
A couple of brokers have rated the company's share price with varying price points over the last couple of months.
Multinational investment bank Macquarie raised its 12-month price target for Polynovo shares by 5.6% to a bullish $2.85 in October.
The broker acknowledged that Polynovo is underperforming its expectations for FY22. However, it predicts the business will make a turnaround, in particular for its NovoSorb product which is poised for growth in the medium to long term.
More recently, financial advisory services firm Wilsons adopted a more bearish tone, slashing its outlook by 29% to $1.42. Its analysts believe the medical company's shares are overvalued at the time being. Based on the current Polynovo share price, this implies a downside of almost 10%.
