Huge upside to Helius Medical in 2023, says Roth

Things are opening up for Helius Medical Technologies (Helius Medical Technologies Stock Quote, Charts, News, Analysts, Financials NASDAQ:HSDT) and the commercialization of its PoNS neurotech. Roth Capital Partners analyst Jonathan Aschoff delivered a report to clients on the company and stock on Tuesday where he reviewed the latest news on HSDT and reiterated a “Buy” rating on the stock.

Based in Newtown, Pennsylvania, Helius Medical develops medical devices focused on neurologic deficits using non-implantable technologies. The company is commercializing the Portable Neuromodulation Stimulator (PoNS), which delivers electrical stimulation to the surface of the tongue to improve balance and gait and is indicated for use in the US as a short-term treatment of gait deficit due to mild-to-moderate symptoms from multiple sclerosis (MS). PoNS is also available in Canada for short-term treatment of chronic balance deficit due to mild-to-moderate traumatic brain injury and for the short-term treatment of gait deficit due to mild and moderate symptoms from MS.

The company announced on Tuesday the launch of a new e-commerce site, representing the first time PoNS is available online via telehealth and with Helius using telehealth platform UpScript for its site.

“Our UpScript partnership simplifies and shortens the process of accessing healthcare providers and getting a PoNS device into the hands of people motivated to improve their walking. And it speaks to our commitment to help patients take the fight against MS into their own hands,” said Helius President and CEO Dane Andreeff in a press release.

Microcap stock Helius Medical fell hard over 2022, going from $5.19 per share at the start of the year to $0.30 by the end of December. But Aschoff sees the stock bouncing back in 2023 and reiterated in his report a 12-month target of $5.00. At press time, that represented a projected return of 1,513 per cent.

Aschoff said Helius’ e-commerce site is a good move.

“Speedy and easy acquisition of the PoNS device via this new partnership between HSDT and UpScript is a definite positive, but PoNS users still must work with a trained physical rehabilitation therapist in-person,” Aschoff wrote.

On Helius’ financial picture, Aschoff is estimating $0.7 million in 2022 revenue and $1.9 million for 2023, with EPS going from negative $7.38 per share in 2021 to negative $1.10 in 2022 and to negative $0.43 in 2023. (All figures in US dollars.)

“Our 12-month price target of $5 is based on a DCF analysis using a 35 per cent discount rate that is applied to all cash flows and the terminal value, which is based on a 4x multiple of our projected 2031 operating income of $233 million,” Aschoff said.