4DMedical Ltd (ASX: 4DX) shares have been among the best performers on the S&P/ASX 200 index (ASX: XJO) over the past 12 months.
During this time, the medical technology company's shares have risen a staggering 360%.
But if you thought the gains may be over, think again.
That's because the team at Bell Potter believes there are still more market-beating returns on offer here over the next 12 months.
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What is the broker saying?
Bell Potter notes that 4DMedical released its full-year results last week. And while the company only revealed modest revenue from its lung imaging technology, the broker believes the initial traction is highly meaningful. It said:
Product revenues of $6.9m includes $1.6m in fee for service revenues which we understand includes a portion of revenues billed for CT:VQ on a fee per scan basis. While the quantum of revenues is modest, we regard this initial traction in fee for service revenues as highly meaningful and we expect these revenues will grow exponentially in the coming quarters as awareness grows.
Elsewhere, the company reported a normalised loss of $33.0m (FY25 loss $35.2m) and net operating cash burn of $31.3m. First revenues are yet to be earned at Simonmed, however, the five academic medical centres contracted for CT:VQ are each using the product on a regular basis.
Looking ahead, the broker sees ongoing traction with clinicians in the US as its major catalyst. It explains:
The major catalyst is the ongoing traction with clinicians in the US. There continues to be a ground swell of support for adoption of CT:VQ particularly amongst pulmonary specialists and interventional pulmonologists in academic hospitals. Inevitably this should radiate to other physicians as evidenced by the Simonmed deal and to some extent in Australia.
Big potential returns for 4DMedical shares
According to the note, in response to the company's results, the broker has retained its speculative buy rating and $6.00 price target on 4DMedical shares.
Based on its current share price of $3.64, this implies potential upside of approximately 65% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into around $16,500 by this time next year if Bell Potter is on the money with its recommendation.
Commenting on its bullish view of the stock, the broker said:
4DX enters FY27 with good momentum at large hospital groups in the US. We expect on going revenue traction throughout the course of the year. Maintain Buy (Speculative) rating.
All in all, this could make 4DMedical worth considering if you have a high tolerance for risk and want exposure to the medical technology industry.
