Yesterday, ASX 200 healthcare stock Polynovo Ltd (ASX: PNV) ended 8% higher after releasing a favourable earnings report.
The company reported a 28.9% increase in group sales to $118.6 million for FY25. Meanwhile, the ASX 200 stock anticipates its FY25 EBITDA to be in the range of $11.2 million to $12.4 million. This is significantly higher than the $3.6 million delivered a year ago.
Evidently, yesterday was a great day to be an existing Polynovo investor. However, those interested in the company may be wondering whether it's too late to invest.
One leading expert weighed in after reviewing the result.
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Macquarie predicts significant upside
Yesterday, Macquarie Group Ltd (ASX: MQG) released a new research note on Polynovo shares.
In that report, the broker reiterated its 'outperform' rating on the stock.
It also assigned a price target of $2.45 to the company. Given that Polynovo shares closed yesterday at $1.32, this suggests there is still 86% upside from here, even after yesterday's surge.
When issuing this recommendation, the broker said:
In the near term, we expect ongoing strong order growth, MTX acceleration and new markets to support sales growth, while in [the] medium term, we expect several new product filings and new market entries.
New products on the horizon
Polynovo's flagship product, NovoSorb, is a biodegradable mesh or dressing used to treat burns.
So far, the company has developed two main products using NovoSorb technology. Its flagship product is NovoSorb BTM, which is used to treat third degree burns. Meanwhile, its second product, NovoSorb MTX, is used to treat second degree burns.
In its research note, Macquarie commented on the status of further product developments:
NovoSorb BTM up to 6mm thickness received 510(k) clearance in June 2025. The company is supplying NovoSorb BTM to Beta Cell Technologies for clinical trials following positive results of the First in Man proof of concept study.
It is worth noting that the company has a large addressable market.
The World Health Organisation (WHO) estimates there are over 11 million burn injury incidences worldwide annually, of which over 180,000 are fatal. This provides Polonovo with a long runway for growth if it is able to successfully market its products.
How have Polynovo shares performed?
Polynovo shares are down 49% over the past year. However, broker Macquarie sees significant upside from here. Those looking to add an ASX 200 healthcare stock to their portfolio should consider Polynovo.
