Sanuwave Health is a buy, Roth Capital says

Roth Capital Markets is initiating coverage of Sanuwave Health (Sanuwave Health Stock Quote, Chart, News, Analysts, Financials NASDAQ:SNWV) with a “Buy” rating and a 12-month price target of $49.00, citing growth potential in the company’s UltraMIST wound care platform. Analyst Kyle Bauser said in a July 29 report that Sanuwave is well-positioned to scale revenue and improve earnings as adoption of its FDA-cleared therapy system expands across clinical settings.

Sanuwave is a medical technology company that develops and commercializes its UltraMIST system, a non-contact, low-frequency ultrasound therapy platform for treating complex wounds. Headquartered in the U.S., the company is focused on improving clinical outcomes in chronic and acute wound care settings.

The UltraMIST device, which received FDA 510(k) clearance in 2014, is indicated for conditions such as diabetic foot ulcers, venous leg ulcers, pressure ulcers, surgical wounds, and deep tissue injuries. It delivers low-frequency ultrasound through a saline mist to support healing by promoting painless debridement and stimulating cellular activity. The system is used by healthcare professionals in hospitals, skilled nursing facilities, home health organizations, and wound clinics.

“The company is experiencing an inflection point that commenced with the acquisition of the UltraMIST wound-care assets from Celularity in August 2020 for $24M, which added $15M in annualized revenue and $4M in EBITDA,” Bauser said “Prior to UltraMIST, the company’s legacy technology, DermaPace, was only generating ~$1M in sales annually and $9M of operating losses. While the acquisition also provided a seasoned sales and reimbursement team, the company’s overhead was still bloated, and the strategy lacked focus.”

To regain covenant compliance and access liquidity in October 2024, SANUWAVE carried out a reverse split, converted $43.2-million in notes and warrants into four million shares, and raised $10.3-million through a PIPE priced at $8.25 per share. The moves coincided with a 60% year-over-year increase in revenue and a 28-point improvement in Adjusted EBITDA margin to 22%. With its stock price up, Sanuwave qualified for and uplisted to the Nasdaq Global Market in March 2025.

“Over the balance of FY25 we expect continued margin expansion and sales growth from lower COGS, a maturing sales force (currently 13 reps vs. three at the beginning of 2024), continued placements beyond its installed base of 1,145 systems, and added manufacturing capacity (currently 10.5K applicators per week going to 24K by year- end),” Bauser said “UltraMIST benefits from established reimbursement, a growing installed base, and a razor-and-blade business model that drives high-margin, recurring revenue (in an estimated $1.6B annual market).”

Bauser thinks that Sanuwave will do $14.2-million in Adjusted EBITDA on sales of $47.1-million in fiscal 2025. He believes those numbers will improve to $19.6-million on sales of $63.7-million in fiscal 2026.

The $49 price target reflects peer-average EV/Sales multiples and a premium EV/AEBITDA multiple of 34.5x, supported by the company’s expected 98% year-over-year EBITDA growth. While revenue estimates are slightly below company guidance, Wittes sees a compelling case for valuation upside based on operating leverage and execution.

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