Profound Medical is a buy, Leede says

Leede Financial analyst Douglas Loe noted in an August 15 update that Profound Medical Corporation (Profound Medical Corporation Stock Quote, Chart, News, Analysts, Financials NASDAQ:PROF) reported lower-than-expected fiscal Q2 2025 revenue, but he maintained his “Buy” rating and one-year price target of US$15.25.

Profound, an Ontario-based developer of ultrasound tissue ablation devices, posted revenue of $2.2-million for the June quarter, compared with $4.2-million in FQ4 2024 and $2.6-million in FQ1 2025. The results included about $0.65-million in capital sales, equal to roughly two TULSA-PRO units, and $1.5-million from procedures and service revenue.

“FQ225 revenue was similar to many trailing quarters, but still disappointing when considering the more positive impact that we expected from improved US TULSA-PRO reimbursement status,” Loe said.

Profound has had specific reimbursement codes in place for TULSA-PRO since January 2025. Loe said this should make it easier for oncology and urology centres with MRI equipment to adopt the technology, but uptake has remained sluggish. Profound currently has about 60 TULSA-PRO systems in clinical use worldwide and is targeting 75 by the end of 2026.

Loe noted that the adoption trend remains disconnected from the device’s clinical performance. He pointed to results from Profound’s pivotal Phase III TACT trial, published in 2021, and longer-term follow-up data presented in 2023. Early trials showed that 96% of patients experienced at least a 75% reduction in PSA levels, while 79% of patients with more advanced disease showed no residual cancer at one year. At five years, PSA levels remained about 90% below baseline. About 8% of patients experienced severe urological side effects, but all had resolved within one year.

“We thought it instructive to remind investors that long-term benefits (low recurrence rates, low side effect severity) from TULSA-PRO ablation have long been in the public domain, are separately well-documented in the peer-reviewed medical literature & are in our view supportive of the device’s adoption on its medical merits alone, independent of secondary commercial factors,” he said.

Looking ahead, Loe is forecasting revenue of $5.1-million in FQ3 2025 and $5.7-million in FQ4 2025, with full-year revenue of $15.6-million. He expects that to increase to $33.0-million in fiscal 2026 and $64.1-million in 2027.

“Our valuation remains based on NPV (discount rate of 20%) and multiples of our F2029 Adjusted EBITDA and EPS forecasts of $59.5-million and $1.35 per share, both discounted at 20%. At current share price levels, our PT corresponds to a one-year return of 175%,” Loe said.

Loe estimates Profound will post Adjusted EBITDA of negative $46.6-million on revenue of $15.6-million in fiscal 2025, improving to negative $36.5-million on revenue of $33.0-million in fiscal 2026

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