The team at Bell Potter have provided fresh analysis on ASX healthcare stock Cogstate Ltd (ASX: CGS).
The company is a healthcare service provider focused on optimising brain health assessments, predominantly for clinical trials of novel medicines.
It has been a shining light in 2026 amongst a weaker ASX healthcare sector.
Cogstate shares have risen 17% year to date while the S&P/ASX 200 Health Care Index (ASX: XHJ) has fallen almost 20%.
Bell Potter appears optimistic the growth can continue in the next 12 months.
Here is what the broker had to say.
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Strong performance continues
According to the broker, the company had another strong quarter.
The company reported new contract sales of US$21.9 million.
This is the fourth quarter in a row with more than US$20 million in sales. Total contract sales for the year reached US$89 million, which is a record for its Clinical Trials business.
Additionally, the company's revenue backlog (work already contracted but not yet recognised as revenue) grew to US$118.5 million, up 32% from a year ago.
This is important because the business now has more future work secured than ever before.
This was a comfortable beat to our prior expectations and is a 54% increase compared to where FY26 contracted revenue started.
Forecasts lifted
The broker also noted the US$21.9 million in new contracts signed in the latest quarter, US$12.7 million will be recognised as revenue in FY27.
This increases the amount of revenue already locked in for FY27 to US$48.3 million, up from US$35.6 million three months earlier.
Bell Potter says this result was better than expected and means FY27 starts with 54% more contracted revenue than FY26 did.
Because of this stronger starting position, Bell Potter has raised its FY27 revenue forecast by 11% and also increased its FY28 forecast.
Bell Potter now expects EBITDA in FY27 and FY28 to be 19-23% higher than previously forecast, with profit margins improving to the mid-30% range.
Increased upside for ASX healthcare stock
Based on this guidance, Bell Potter has increased its price target on Cogstate shares to $3.70 (previously $3.20).
The broker has retained its buy recommendation.
Based on yesterday's closing price, this indicates 37% upside potential for this ASX healthcare stock.
We were surprised with the soft share price response today following what we considered to be another strong quarterly update with little to scrutinise.
The discount is despite Cogstate's far higher growth rate than peers, now forecast at ~18% annualised over the next 2 years compared to peers ranging from -1% to 8%, i.e. Cogstate has more than double the growth outlook of the next best CRO peer, not to mention a higher NPAT margin (BPe 24%) and no debt.
