Although the market has dropped lower again on Tuesday, that hasn't stopped the Nanosonics Ltd (ASX: NAN) share price from racing higher.
In fact, the infection control specialist's shares climbed almost 3% today to hit an all-time high of $5.02.
When its shares reached that milestone, it meant they had risen a massive 108% since this time last year.
Why is the Nanosonics share price at an all-time high?
The majority of the company's share price gain has come in 2019 following the release of an impressive half year result.
In the first half of FY 2019 Nanosonics achieved sales of $40.7 million, which was an increase of 36% on the prior corresponding period.
This solid top line growth was driven by increasing demand for its best-in-class trophon EPR product and strong sales of the consumables the product uses.
Capital revenue was up 11% on the prior corresponding period to $16.4 million and consumables and service revenue increased 59% on the prior corresponding period to $24.3 million. The latter reflects the continuing growth in the installed base, which at the end of the period had grown 20% since the same time last year to a total of 19,310 units.
Whilst this sounds like a large number, management estimates that it has an addressable market of 120,000 units. This means it has captured only 16% of its addressable market, which I believe gives it a significant runway for growth.
Is it too late to invest?
Whilst this strong share price rally over the last 12 months means that Nanosonics' shares are changing hands at a lofty 115x estimated full year earnings, I still think it would be a great long term investment.
Especially given how the company is building a pipeline of potential new products with a goal of introducing a range of new products over time commencing with the first by the end of FY 2020, subject to regulatory approval.
If these products are half as successful as the trophon EPR offering, then Nanosonics is likely to have a very bright future ahead of it.
Overall, I see it as a great long-term investment in the healthcare sector along with CSL Limited (ASX: CSL) and Pro Medicus Limited (ASX: PME).
