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Nanosonics Limited (ASX:NAN) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of NAN, it is a financially-robust company with a great history and a excellent future outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Nanosonics here.
Exceptional growth potential with flawless balance sheet
NAN is an attractive stock for growth-seeking investors, with an expected earnings growth of 48% in the upcoming year. This growth in the bottom-line is bolstered by an impressive top-line expansion of 64% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. In the previous year, NAN has ramped up its bottom line by 67%, with its latest earnings level surpassing its average level over the last five years. Not only did NAN outperformed its past performance, its growth also exceeded the Medical Equipment industry expansion, which generated a 62% earnings growth. This is an notable feat for the company.
NAN's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that NAN manages its cash and cost levels well, which is a key determinant of the company’s health. NAN appears to have made good use of debt, producing operating cash levels of 8.39x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For Nanosonics, I've put together three fundamental factors you should further research:
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Valuation: What is NAN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether NAN is currently mispriced by the market.
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Dividend Income vs Capital Gains: Does NAN return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from NAN as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NAN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.