The Polynovo (ASX:PNV) share price sank to multi-year lows today. What's going on?

The company's shares finished deep in the red again. We take a closer look.

| More on:
a doctor with stethoscope around neck sits as a computer with head in hand, looking despondent.

Image source: Getty Images

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

Key points

  • Polynovo shares continue to slide, hitting a multi-year low today
  • The company ranks seventh as the most shorted stock on the ASX, at 9%
  • Polynovo is scheduled to release its half-year results later this month

The Polynovo Ltd (ASX: PNV) share price had a tough day on the ASX, touching a new multi-year low of $1.165.

This comes despite the medical device company not releasing any announcements to the ASX in almost a month.

At the close, Polynovo shares were swapping hands for $1.17 apiece, down 3.31%. They are now down 25% this year to date.

Let's take a look at what is impacting the company's share price of late.

Polynovo continues to attract short interest

The negative sentiment around the Polynovo share price continues to attract the attention of investors holding short positions.

Largely, the inconsistent performance of the business regardless of its outlook may have led to a deterioration in the Polynovo share price.

Management previously stated that challenging market conditions caused by COVID-19 created headwinds for the company.

Although the United States reported a surge in sales volumes, as a whole Polynovo missed the mark on investor expectations. This is mainly related to the underperformance achieved in the United Kingdom, Ireland, and Europe.

Last Wednesday, the Australian Securities & Investments Commission (ASIC) released its short position report indicating an increased short interest in Polynovo shares.

As such, Polynovo took up the seventh spot on the list with 9% of its shares being shorted. This represents a 5.7% increase from the start of the month when its shares had a short interest of 8.51%.

Given the scope of short positions being taken up, it is possible investors believe the company's performance will be underwhelming when it reports its half-year results later this month.

About the Polynovo share price

Financial advisory services firm Wilsons cut its 12-month price target for Polynovo shares by 29% to $1.42 in November.

Based on the current Polynovo share price, this implies an upside of roughly 21% for investors.

Looking back, the medical device company's shares fell around 60% in value in 2021. In comparison, the S&P/ASX 200 Healthcare Index (ASX: XHJ) gained around 8% in the same time frame.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

stockmarket graphic in background with man looking at stockmarket on phone
Healthcare Shares

CSL shares are a buy – UBS

This expert is optimistic on what the business can achieve despite headwinds.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Healthcare Shares

Broker says this ASX 200 biotech stock is a top buy

Let's see what Bell Potter is saying about this biotech.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why CSL shares are a buy today despite the looming Trump tariffs

A leading expert believes CSL shares are still trading for a bargain today. Here's why.

Read more »

A businesswoman pulls her glasses down in shock to look at the bad news on her computer.
Healthcare Shares

Why did the Telix share price just crash 16%?

Investors are sending the Telix share price plunging today. But why?

Read more »

Broker analysing the share price.
Healthcare Shares

Expert: 2 ASX healthcare stocks to avoid before reporting season

Not all healthcare stocks are created equal.

Read more »

A group of people in a corporate setting do a collective high five.
Healthcare Shares

Should I buy Pro Medicus or CSL shares ahead of earnings season?

The ASX healthcare sector may be currently undervalued.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Healthcare Shares

Why Mesoblast shares can keep storming higher

More big returns could be on the way for buyers of this high risk stock according to Bell Potter.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »