Quick Update: SNWV's Recent Pre-Announcement
Rehashing the math after lowering FY'25 guide
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For reference to today’s post, see our original shared work + our conversation with Tenva Capital here.
Yesterday, SANUWAVE (SNWV) pre-announced Q3’25 earnings, and it took a lot of us by surprise (link). Guidance for Q3 came in lighter than anticipated, at between $11.4M and $11.6M (+22.9% at the midpoint), compared to the original guidance laid out on August 8th, which ranged from $12M to $12.7M (+31.9% at the midpoint).
The stock sold off by ~20% after hours, with a decline of as much as 27% at its lows, and there’s really no way to sugarcoat this, but it was quite a gut punch.
On the call, Morgan Frank (CEO) described this miss as a result of a difficult start to the quarter from providers delaying treatments due to uncertainty about proposed reimbursement changes. However, even after the slow start, September ended up being the highest revenue month in SANUWAVE's history. Odd since the former commentary would suggest that a hard ramp towards the end of the month wouldn’t have been likely.
But there are a few things that stand out to us, which unfortunately does change the math. Below, we’re going to go over what we know from the PR and the call and how that changes our expectations for valuation.