Is the Somnomed share price a turnaround story?

Somnomed Limited (ASX: SOM) has restructured its sales and reports its outlook is "very positive".

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Somnomed Limited (ASX: SOM) share price opened 6.7% higher at $1.60 today after the sleep treatment medical device business reported an operating cash profit of $798,000 on revenue of $17.95 million for the quarter ending June 30, 2019. For the financial year the company posted an operating cash loss of $6.2 million on revenue of $65.1 million.

The company has been through something of a 'reset' or 'turnaround' year that involved it scrapping some of its third party distribution sales channels to focus on direct sales, with the worse side effects of that decision now starting to cycle out of its accounts. 

"The prospects for the SomnoMed Group are very positive and the return of strong revenue growth in both the US and Canada has brought energy and excitement back into the company. SomnoMed offers a patient friendly and highly compliant, comfortable alternative to CPAP which aims to treat a growing proportion of patients who suffer from Obstructive Sleep Apnea ("OSA") with a COATT device," commented 

As such Somnomed competes with larger sleep treatment businesses such as ResMed Inc. (ASX: RMD) and Fisher & Paykel Healthcare Ltd (ASX: FPH) by offering a more convenient mouthguard-like product than the masks and airflow machines that are the core products of its much bigger rivals.

SomonMed looks a business worth further research for small-cap enthusiasts as it progresses its turnaround story. 

Motley Fool contributor Tom Richardson owns shares of ResMed Inc.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A cute young girl with curly hair sips a glass of milk through a straw with a smile on her face.
Broker Notes

Up 37% this year, why Macquarie expects A2 Milk shares to keep outperforming

Macquarie remains bullish on A2 Milk shares heading into 2026. Let’s see why.

Read more »

Woman and man calculating a dividend yield.
Share Market News

Big week for markets: Here's what to watch

Tech earnings, rate speculation, and Aussie inflation data could shake markets this week — but long-term investors should keep their…

Read more »

ASX shares Business man marking buy on board and underlining it
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

dissapointed man at falling share price
Share Fallers

Why Boss Energy, Elsight, Pilbara Minerals, and Whitehaven Coal shares are falling today

These shares are starting the week in the red. But why?

Read more »

An older female ASX investor holds a gangster-style fist pump pose showing off gold rings with dollar signs on them.
Broker Notes

Why Macquarie forecasts Northern Star shares are set to surge 55%

Macquarie believes Northern Star shares are well-placed to rocket higher.

Read more »

A group of people gathered around a laptop computer with various expressions of interest, concern and surprise on their faces. All are wearing glasses.
Share Market News

ASX 200 tech stock near record high, is it still a buy?

This company's soaring share price and rising profits are turning heads.

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why Bellevue Gold, Bubs, Clarity Pharmaceuticals, and Regal Partners shares are rising today

These shares are starting the week on a positive note.

Read more »

Two people lazing in deck chairs on a beautiful sandy beach throw their hands up in the air.
Travel Shares

Guess which ASX All Ords travel stock just rocketed 17% on an earnings upgrade

Investors are piling into the ASX All Ords travel stock today. Here's what's happening.

Read more »