4DMedical Ltd (ASX: 4DX) shares have been in focus this week.
Some big news out of the small cap has sent its shares rocketing higher.
But is it too late to buy this healthcare technology stock? Not according to Bell Potter.
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What is Bell Potter saying about this small cap ASX share?
As mentioned above, there has been big news out of the company this week. This relates to its CT:VQ product and the US FDA. Bell Potter was very pleased with the development. It said:
The FDA has approved the 510K for the 4DX CT:VQ product. The approval is based on data including head to head studies demonstrating non inferiority to conventional diagnosis of a range of pulmonary conditions including pulmonary embolism.
The approval represents the first ever contrast free technology for the assessment of perfusion (blood flow) in pulmonary embolism. In patients contra indicated for contrast enhanced CT, this is normally the result of a high risk of kidney damage due to the iodine contrast. The 4DX technology by-passes nuclear medicine entirely, collecting all the data from a single contrast free CT scan. The workflow fits in exceptionally well with hospital ED's as the processing of the 4DX algorithm is cloud based and out of the individual hospitals control and is more timely and less cost.
Big potential returns
The small cap ASX share may have been rocketing this week, but there is still plenty more upside ahead according to the broker.
However, it has warned that this is an investment only for those with a high risk tolerance.
It has retained its speculative buy rating on its shares with an improved price target of $1.05 (from 70 cents). Based on its current share price of 77 cents, this implies potential upside of 36% for investors over the next 12 months.
This would turn a $10,000 investment into approximately $13,600 if Bell Potter is on the money with its recommendation.
Commenting on the news, Bell Potter has decribed the approval as a game changer for the company. It concludes:
The 4DX tech has taken some time to gain traction, however, the inclusion of CT:VQ is a game changer, particularly if hospital revenues are boosted with attractive reimbursement terms. Next major catalyst is announcement of first material revenues from the Phillips partnership. Valuation is raised to $1.05, retain Buy (Spec) rating.
