TSX:PRN

Stock Analysis Report

Executive Summary

Profound Medical Corp. operates as a medical technology company focuses on magnetic resonance guided ablation procedures in Canada, Germany, and Finland.

Rewards

Trading at 93.2% below its fair value

Earnings are forecast to grow 61.55% per year

Risk Analysis

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year

Does not have meaningful revenue (CA$4M)



Snowflake Analysis

Exceptional growth potential with excellent balance sheet.


Similar Companies

Share Price & News

How has Profound Medical's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PRN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-6.1%

PRN

-1.1%

CA Medical Equipment

-0.3%

CA Market


1 Year Return

87.8%

PRN

-6.9%

CA Medical Equipment

9.2%

CA Market

Return vs Industry: PRN exceeded the Canadian Medical Equipment industry which returned -5.1% over the past year.

Return vs Market: PRN exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

PRNIndustryMarket
7 Day-6.1%-1.1%-0.3%
30 Day16.2%10.2%1.7%
90 Day27.4%18.2%6.0%
1 Year87.8%87.8%-6.9%-6.9%12.7%9.2%
3 Year69.8%69.8%-41.1%-41.1%17.0%6.4%
5 Yearn/a-30.9%-30.9%37.1%17.0%

Price Volatility Vs. Market

How volatile is Profound Medical's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Profound Medical undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRN (CA$16.58) is trading below our estimate of fair value (CA$243.37)

Significantly Below Fair Value: PRN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PRN is unprofitable, so we can't compare its PE Ratio to the Medical Equipment industry average.

PE vs Market: PRN is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PRN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PRN is overvalued based on its PB Ratio (8.4x) compared to the CA Medical Equipment industry average (4.2x).


Next Steps

Future Growth

How is Profound Medical forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

61.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: PRN is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: PRN's is expected to become profitable in the next 3 years.

Revenue vs Market: PRN's revenue (49.2% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: PRN's revenue (49.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PRN's Return on Equity is forecast to be very high in 3 years time (65.7%).


Next Steps

Past Performance

How has Profound Medical performed over the past 5 years?

-11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRN is currently unprofitable.

Growing Profit Margin: PRN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: PRN is unprofitable, and losses have increased over the past 5 years at a rate of -11.4% per year.

Accelerating Growth: Unable to compare PRN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: PRN is unprofitable, making it difficult to compare its past year earnings growth to the Medical Equipment industry (28.3%).


Return on Equity

High ROE: PRN has a negative Return on Equity (-85.41%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Profound Medical's financial position?


Financial Position Analysis

Short Term Liabilities: PRN's short term assets (CA$33.0M) exceed its short term liabilities (CA$9.2M).

Long Term Liabilities: PRN's short term assets (CA$33.0M) exceed its long term liabilities (CA$10.5M).


Debt to Equity History and Analysis

Debt Level: PRN's debt to equity ratio (52.2%) is considered high.

Reducing Debt: PRN had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet

Inventory Level: PRN has a low level of unsold assets or inventory.

Debt Coverage by Assets: PRN's debt is covered by short term assets (assets are 2.7x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: PRN has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: PRN has sufficient cash runway for 1.9 years if free cash flow continues to reduce at historical rates of -8.6% each year.


Next Steps

Dividend

What is Profound Medical's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.5%industryaverage1.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate PRN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PRN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PRN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PRN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PRN's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Profound Medical's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average board tenure


CEO

Arun Menawat (64yo)

3.4yrs

Tenure

CA$855,665

Compensation

Dr. Arun Swarup Menawat, Ph.D., MBA, has been the Chief Executive Officer of Profound Medical Corp. since August 15, 2016. Dr. Menawat served as the Chief Executive Officer and President of Novadaq Technol ...


CEO Compensation Analysis

Compensation vs Market: Arun's total compensation ($USD650.57K) is about average for companies of similar size in the Canadian market ($USD686.05K).

Compensation vs Earnings: Arun's compensation has increased whilst the company is unprofitable.


Board Age and Tenure

3.8yrs

Average Tenure

62yo

Average Age

Experienced Board: PRN's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: PRN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$175,00002 Jan 20
Rashed Dewan
EntityIndividual
Shares12,500
Max PriceCA$14.00

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.2%.


Management Team

  • Arun Menawat (64yo)

    CEO & Director

    • Tenure: 3.4yrs
    • Compensation: CA$855.67k
  • Aaron Davidson (51yo)

    CFO & Senior VP of Corporate Development

    • Tenure: 1.7yrs
    • Compensation: CA$1.23m
  • Stephen Kilmer

    Investor Relations


    Board Members

    • Art Rosenthal (72yo)

      Independent Director

      • Tenure: 1.6yrs
      • Compensation: CA$35.17k
    • Brian Ellacott (62yo)

      Independent Lead Director

      • Compensation: CA$36.17k
    • Arun Menawat (64yo)

      CEO & Director

      • Tenure: 3.4yrs
      • Compensation: CA$855.67k
    • Ken Galbraith (56yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: CA$47.59k
    • Jean-François Pariseau (49yo)

      Independent Director

      • Tenure: 4.6yrs
    • Eric Klein

      Member of Clinical Advisory Board

      • Peter Albertsen

        Member of Clinical Advisory Board

        • Scott Eggener

          Member of Clinical Advisory Board

          • Adam Kibel

            Member of Clinical Advisory Board

            • Aytekin Oto

              Member of Clinical Advisory Board

              Company Information

              Profound Medical Corp.'s company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: Profound Medical Corp.
              • Ticker: PRN
              • Exchange: TSX
              • Founded:
              • Industry: Health Care Equipment
              • Sector: Healthcare
              • Market Cap: CA$244.166m
              • Shares outstanding: 14.98m
              • Website: https://www.profoundmedical.com

              Number of Employees


              Location

              • Profound Medical Corp.
              • 2400 Skymark Avenue
              • Unit 6
              • Mississauga
              • Ontario
              • L4W 5K5
              • Canada

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              PRNTSX (The Toronto Stock Exchange)YesCommon SharesCACADJun 2015
              PROFNasdaqCM (Nasdaq Capital Market)YesCommon SharesUSUSDJun 2015

              Biography

              Profound Medical Corp. operates as a medical technology company focuses on magnetic resonance guided ablation procedures in Canada, Germany, and Finland. It is developing a treatment to ablate the prostate gland in prostate cancer patients, treatment of uterine fibroids and nerves, and palliative pain treatment for patients with metastatic bone disease. The company is headquartered in Mississauga, Canada. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/25 00:47
              End of Day Share Price2020/01/24 00:00
              Earnings2019/09/30
              Annual Earnings2018/12/31


              Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.