Advanced Laser Therapies And Personalized Medicine Will Expand Global Healthcare

Key Takeaways

• Expansion into advanced laser therapies and personalized medicine, plus a growing pipeline, positions the company for sustained, demographically-driven revenue growth.
  
• Operational efficiencies, recurring income, and global partnerships enhance revenue stability, margin improvements, and exposure to expanding healthcare markets.
  
• Exposure to trade uncertainties, ongoing cash burn, customer concentration, supply chain risks, and an unproven new business model all threaten growth, profitability, and financial stability.

Catalysts

Designs, manufactures, and markets lasers products for medical and other diagnostic applications.

• Doubling of revenue year-over-year and the expansion of the pipeline (32 projects, addition of three new multibillion-dollar global customers) indicate strong future sales momentum driven by increasing adoption of advanced laser therapies and personalized medicine applications, positioning the company to capitalize on demographic trends in aging populations, which is likely to drive sustained revenue growth.
  
• Increasing number of installed sites (PPT model), especially in high-value therapeutic areas, along with recurring revenue from service/software and upfront commitments from large institutions, suggests a growing base of predictable and higher-margin income, supporting improvements in both revenue stability and net margins.
  
• Operational efficiencies and improved supplier quality, combined with the shift from prototype-heavy development to pilot production and established product platforms, are driving significant progress in gross margin (returning to historical high levels), which should continue to positively impact EBITDA and net profit as scale increases.
  
• Regulatory and reimbursement environment is gradually enabling expansion of treatable indications and patient populations, as demonstrated by the increase in treatment sites and reduced delays, expanding the addressable market and directly supporting top-line revenue potential.
  
• Strategic investments in U.S. manufacturing presence to mitigate tariff risks, combined with high customer engagement from global pharma and healthcare partners, position Modulight Oyj to benefit from expanding global healthcare spending and the digital health infrastructure, which should increase both future sales and strengthen long-term margin profile.

Modulight Oyj Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Modulight Oyj's revenue will grow by 31.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from -76.4% today to 3.4% in 3 years time.
• Analysts expect earnings to reach €622.7 thousand (and earnings per share of €0.01) by about August 2028, up from €-6.2 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €2.2 million in earnings, and the most bearish expecting €-1.8 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 139.0x on those 2028 earnings, up from -9.5x today. This future PE is greater than the current PE for the FI Medical Equipment industry at 27.3x.
• Analysts expect the number of shares outstanding to decline by 5.09% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.33%, as per the Simply Wall St company report.

Modulight Oyj Future Earnings Per Share Growth

Risks

• Ongoing global tariff uncertainties, particularly related to U.S. semiconductor and pharmaceutical tariffs, could result in higher costs or disrupt Modulight's market access, especially given the company's significant exposure to the U.S. market. This introduces risk to both revenue growth and profit margins if exemptions are lost or new trade barriers emerge.
  
• The company remains in a cash burn phase despite recent improvements, and management has not provided clear financial guidance or committed to turning cash flow or EBITDA positive within a specified timeline, increasing the risk of future equity dilution or funding constraints that could depress earnings per share and share price.
  
• Modulight's heavy reliance on a still relatively small number of ongoing pipeline projects (32) and a concentration of revenue from a select group of treatment sites and markets exposes it to customer concentration and project delay risks; any slowdown or loss of key customers, or regulatory delays in project commercialization, could significantly impact revenue and earnings predictability.
  
• Persistent supplier quality issues and the need for intensive collaboration to resolve material inconsistencies expose Modulight to input cost volatility and production delays, which could pressure gross margins and disrupt the scaling of manufacturing operations necessary for sustainable profit growth.
  
• The transition to a new business model (PPT), while promising higher gross margins, is still nascent and dependent on ramping patient treatment numbers at existing and new sites; if clinical adoption, regulatory approvals, or expansion to additional indications are slower than anticipated, this could result in sluggish revenue growth and margin pressure.

Valuation

• The analysts have a consensus price target of €2.0 for Modulight Oyj based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €2.4, and the most bearish reporting a price target of just €1.6.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €18.4 million, earnings will come to €622.7 thousand, and it would be trading on a PE ratio of 139.0x, assuming you use a discount rate of 6.3%.
  
• Given the current share price of €1.39, the analyst price target of €2.0 is 30.5% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.