SOON SW

Sonova Holding AG

Healthcare


Presented:02/28/2020
Price:CHF229.80
Cap:$15.16B
Current Price:CHF317.40
Cap:$19.66B

Presented

Date02/28/2020
PriceCHF229.80
Market Cap$15.16B
Ent Value$16.33B
P/E Ratio23.89x
Book ValueCHF35.19
Div Yield1.26%
Shares O/S63.51M
Ave Daily Vol294,357
Short IntN/A

Current

PriceCHF317.40
Market Cap$19.66B
Sonova Holding AG engages in the manufacture of hearing care solutions. It operates through Hearing Instruments and Cochlear Implants segments. The Hearing Instruments segment t includes the activities of the design, development, manufacture, distribution and service of hearing instruments and related products. The Cochlear Implants segment includes the activities of the design, development, manufacture, distribution and service of hearing implants and related products. Its products include Phonak, Unitron, Connect Hearing, and Advanced Bionics. The company was founded by Andreas E. Rihs, Beda Diethelm, and Hans-Ueli Rihs in 1985 and is headquartered in Stafa, Switzerland.

Publicly traded companies mentioned herein: General Electric Co (GE), Panasonic Corp (6752 JP), Sonova Holding AG (SOON SW)

Highlights

The presenter is short shares of Sonova Holding AG (SOON SW), the Swiss-based hearing aid company. The presenter believes that over the next year SOON will be impacted by decelerating top line growth and margin compression. Additionally, he sees optionality around new FDA legislation that would make it easier for other companies to compete in the hearing aid space. SOON’s longer term guidance for top line growth has been 4% - 6%. When management gives their full year 2021 guidance in May, the presenter believes that they’ll guide to the low end of that range. Lowering top line guidance would imply MSD bottom line growth vs. the Street’s consensus estimate of HSD, and should cause the multiple to recalibrate. The presenter believes SOON will generate CHF8.50 in earnings next year (10% below the Street). Applying a 20x multiple to that earnings estimate gets him to a price target of CHF170. The stock currently trades at CHF250 or 30x.

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