Bonesupport Holding (OM:BONEX) Margin Decline Challenges Bull Case Despite Strong Growth Forecasts

Bonesupport Holding (OM:BONEX) reported high-quality earnings, turning profitable over the last five years and achieving impressive earnings growth of 63% per year during that period. Net profit margins for the most recent period landed at 13.9%, below last year’s 39.3%. Earnings are projected to accelerate by 58.25% per year going forward, outpacing not just the Swedish market but also revenue, which is forecast to grow 30.4% annually compared to a local benchmark of 3.6%. Despite robust growth projections and the stock trading below its estimated fair value, investors will note that net profit margins have declined and the forward P/E ratio sits far above both industry and peer averages, highlighting the company's premium valuation and raising questions about sustainable profitability.

See our full analysis for Bonesupport Holding.

In the next section, we will see how the numbers measure up against the current market narratives and community expectations. Some long-held views may be confirmed, while others could be challenged.

See what the community is saying about Bonesupport Holding

NTAP Expiry and Currency Shifts Squeeze Margins

• Net profit margins currently stand at 13.9%, down sharply from last year’s 39.3%. Analysts link this decline to escalating selling expenses and ongoing currency headwinds.
• Consensus narrative notes that high repeat usage and new indications in the U.S. are fueling revenue growth. However, these gains are being undermined by two major pressures:
  • Currency fluctuations, especially swings in the U.S. dollar to Swedish krona, have significantly reduced reported operating profits and are expected to continue impacting net margins.
  • The recent or upcoming expiration of NTAP reimbursement for CERAMENT G may reduce sales unless permanent increases are secured, adding to the risk that margin expansion will lag revenue growth.

Price-to-Earnings Ratio Dwarfs Peers

• Bonesupport Holding’s current price-to-earnings ratio of 106.1x is far above the biotech industry average of 18x and its peer group at 28x, raising questions relative to the profit outlook.
• According to analysts’ consensus view, this premium valuation is only justified if robust annual earnings growth of 58.25% and a forecasted margin expansion to 32.1% are delivered as planned:
  • By 2028, the analysts’ scenario assumes SEK 2.6 billion in revenue and SEK 843.6 million in earnings, resulting in a forward P/E of 37.9x. This remains higher than the SE Biotechs industry average of 32.5x.
  • The current share price of 238.4 sits below the analyst target price of 407.8. Whether this gap narrows depends on the company sustaining growth and achieving higher profitability in the coming years.

Analyst Targets Outpace Current Price

• The current share price of 238.4 is 41.5% below the analyst price target of 407.8 and 46% below the DCF fair value of 444.74. This positions Bonesupport as undervalued by these benchmarks.
• Consensus narrative points out that for this upside to be realized, investors must accept both the high-growth forecasts and the risks of margin volatility:
  • To reach the price target, the company must achieve aggressive earnings and margin goals while overcoming ongoing cost and regulatory challenges.
  • There is a notable spread between the most bullish analyst (targeting 474.0) and the most bearish (targeting 375.0), highlighting ongoing debate about whether high selling expenses, competitive pressures, and margin erosion could affect future gains.

What drives those bold analyst targets, and can they withstand the margin and cost challenges? See inside the consensus case with the latest narrative. 📊 Read the full Bonesupport Holding Consensus Narrative.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Bonesupport Holding on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Bonesupport Holding research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

Bonesupport Holding’s declining net margins, outsized P/E, and margin volatility raise real concerns about valuation and the sustainability of forecasted growth.

If premium pricing and profit pressure do not appeal to you, find more reasonable prospects trading below their worth by using these 876 undervalued stocks based on cash flows now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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