Saluda Medical Inc (ASX: SLD) shares had a day to forget on Friday.
The ASX healthcare share ended the week with a 25% decline to 48 cents after the market responded negatively to its FY 2026 results.
While this is disappointing, the team at Bell Potter believes it could have created a very attractive buying opportunity.
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What is the broker saying?
Saluda Medical is a medical device company commercialising spinal cord stimulation (SCS) therapy.
Bell Potter notes the ASX healthcare share reported higher than expected operating expenses in FY 2026, which resulted in a sizeable adjusted EBITDA loss. It said:
Revenue was pre-released at the Q4 update, increasing +28% for the full year with a particularly strong 2H (up +38% on pcp). Gross margin of 48.9% was ahead of our forecast (48.5%) and improved +2.3% yoy. Opex was above our forecast, resulting in loss at EBITDA (adjusted) of -$113.7m albeit still coming better than Prospectus guidance of -$114.7m.
However, there were positives. It adds:
In SLD's first full-year result since listing, management has beaten each key metric guided to at the time of the IPO (revenue, EBITDA loss, cashflow). Closing cash balance was $116m and excludes $25m of undrawn debt available under the Perceptive loan available to be drawn down in 1H FY27.
Looking ahead, Bell Potter points out that management is guiding to more strong top line growth and another EBITDA loss. It adds:
The company provided four key FY27 guidance statements: (1) revenue growth of 25-35% ($113m-122m); (2) gross margin 50%-52% while reiterating the longer-term target of 'mid-60s' once the next generation IPG and percutaneous leads are submitted to and approved by the FDA (launch guided to CY27); (3) adjusted EBITDA loss $101-95m; and (4) revenue growth to outpace opex growth.
Big potential returns
Bell Potter remains very positive on the ASX healthcare share.
In response to its results, the broker has retained its buy rating and $1.60 price target on its shares.
Based on its current share price, this implies potential upside of approximately 230% for investors over the next 12 months.
Speaking about its buy thesis, Bell Potter said:
SLD's US commercial execution continues to impress and accelerated considerably in recent quarters (34% US growth in Q3, 45% in Q4). Tailwinds continue to build following FDA approval of SLD's paddle lead in June and ~40% of the current sales force expected to complete training in FY27 and contribute to revenue generation. Real-world data continues to affirm Evoke's value proposition: greater efficacy durability means fewer reprogramming requirements and therefore greater revenue/rep compared to conventional devices.
