The Polynovo Ltd (ASX: PNV) share price has continued to decline, sending investors for the exits.
Since the beginning of 2022, the company's shares have lost 38% to hit a multi-year low of 83.5 cents today.
Although a slight rebound has occurred during afternoon trade, its shares are still down 2.85% to 93.8 cents.
Below, we take a look at what is impacting the company's share price of late.
Polynovo shares continues to attract short interest
Following the company's first half results, negative sentiment around the Polynovo share price continues to induce investors holding short positions.
This comes despite the company reporting solid growth over the last 6 months, particularly across the United States segment.
Notably, management refrained from providing a meaningful outlook for H2 FY22, which may have caused investors to sell Polynovo shares.
Previously, the company stated that challenging market conditions caused by COVID-19 created headwinds for the company.
On 2 March, the Australian Securities & Investments Commission (ASIC) released its short position report, indicating an increased short interest in Polynovo shares.
As such, Polynovo took up sixth place with the highest number of investors shorting its shares at 8.92%. This is a 3.2% increase from the same time last month when Polynovo had a short interest of 8.64%.
Given the scope of short positions being taken up, it appears investors believe the company's performance will be inconsistent.
What do the brokers think?
Following Polynovo's financial scorecard for H1 FY22, Wilsons further cut its 12-month price target for the company's shares by 22% to $1.11.
It appears the broker is acknowledging that Polynovo is underperforming its expectations for FY22 thus far.
In addition, Macquarie had a similar tone, slashing its rating by 44% to $1.60 per Polynovo share. Based on the current share price, this implies an upside of roughly 70.5% for investors.
Polynovo share price summary
Over the past 12 months, the Polynovo share price has continued its downward trend to post a 60% loss.
In comparison, the S&P/ASX 200 Healthcare (ASX: XHJ) sector has gained around 2.6% in the same timeframe.
Based on today's price, Polynovo presides a market capitalisation of about $618.68 million and has approximately 661.69 million shares outstanding.
