Nanosonics share price leaps 9% on booming earnings in the first half

The infection prevention specialist delivered a mighty half of growth…

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Key points

  • The Nanosonics share price is up 9.3% to $5.18 after the company posted its first-half trading update for FY23
  • Revenue surged 35% year on year to $81.6 million, boosted by a favourable foreign exchange rate
  • The company has revised its FY23 revenue growth and gross margin upward today

The Nanosonics Ltd (ASX: NAN) share price is making a major move to the upside on Thursday.

Shares in the infection prevention company are trading at $5.18, up a meaningful 9.3%. Earlier this morning, the share price reached a high of $5.42 — just 4 cents away from its 52-week high. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is a much smaller 0.28% above its previous close today.

The considerable Nanosonics share price jump follows the release of its FY23 first-half trading update this morning.

Growth gives the Nanosonics share price a boost

Here are the key takeaways from the ASX healthcare company's first half of FY23:

  • Total revenue increased 35% year-on-year to $81.6 million
  • Gross profit up 39% to $64.4 million
  • Operating expenses increased 28% to $54.5 million
  • Operating income before tax jumped 245% to $11.4 million
  • Global installed base grew to around 31,120 units

The company's revenue benefitted from a favourable foreign exchange rate, assisting in the 35% increase. On a constant currency basis, Nanosonics' revenue jumped 27% compared to the prior corresponding period.

In addition, a transition to more direct sales and an expansion of its newer trophon2 base drove top-line growth.

What else happened in the first half?

It was an uneventful past six months for Nanononics in terms of announcements. The most notable was the company being issued an ASX price query in December as the Nanosonics share price slumped nearly 14% in a single session — to which no explanation was given.

However, the lack of news hasn't hobbled the company's shares. Over the past six months, the Nanosonics share price has climbed 26% higher.

What's next?

A revised outlook for the full year accompanied the company's trading update today. According to the release, Nanosonics now anticipates total revenue growth in FY23 to be between 36% and 41% compared to the previous guide of 20% to 25%.

Furthermore, the gross margin is now forecast to land between 77% and 79% — improving on the prior 75% to 76% range. Unfortunately, the improved metrics come at a higher operating expense growth of between 22% to 27% compared to the previous 15% to 18%.

The company will release its complete first-half results on 23 February.

Nanosonics share price snapshot

While the Nanosonics share price has enjoyed a sensational run over the past six months, it is barely in line with where it was a year ago. On a one-year comparison, Nanosonics is roughly 3% in the red still, despite the growth of the business.

What some investors may not know is that the healthcare company has an exceptional balance sheet. At the end of June 2022, Nanosonics held $94.5 million in cash and no debt.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Nanosonics. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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