Biome Australia [ASX:BIO]
Healthcare & Biotechnology
Biome Australia – Scaling Up to Dominate the Probiotic Health Market
We initiate coverage on Biome Australia (ASX: BIO) with a 12-month target price of A$0.91, representing a 68% upside from the current share price of A$0.54. Biome is an innovator in the health and wellness sector, focused on developing and distributing evidence-backed probiotics and complementary health products. With distribution points expected to grow from 5,000 to 8,000 under its Vision 27 Strategic Plan, the company is expanding both domestically and internationally. Backed by strong clinical data, Biome’s proprietary formulations address key consumer health needs and position it to capitalise on the growing global demand for evidence-based wellness solutions.
Strong Leadership Driving Strategic Growth and Profitability in a Founder-led Business
Biome Australia’s success is driven by its strong leadership team, which has been instrumental in executing the company’s Vision 27 Strategic Plan and positioning it as a leader in the evidence-based probiotics market. CEO Blair Norfolk has played a key role in scaling Biome’s operations and ensuring a focus on innovation and disciplined growth. The leadership team’s strategic approach, including strengthening mid-level management and prioritising operational efficiency, has supported the company’s transition to profitability and sustained cash flow generation. Their track record of execution and commitment to shareholder value reinforces confidence in Biome’s ability to achieve its growth ambitions and deliver long-term value.
Expanding Market Opportunities Support Strong Growth Thesis and Shareholder Value
The global probiotics market is projected to grow at a CAGR of 14.1%, reaching US$133.9 billion by 2030. Biome’s focus on innovative, clinically validated products positions it to capture a meaningful share of this expanding market. Domestically, Biome is increasing its distribution network across Australia, while internationally, it is targeting high-growth markets in the UK, Ireland, and Canada. These initiatives are key drivers of Biome’s ambitious revenue growth targets, forecast to reach A$56.1 million by FY28E, representing a compound annual growth rate of 37% from FY24A.
Valuation Range of A$0.87–A$0.95 per Share
Using a DCF methodology with a perpetual growth terminal value, we estimate Biome’s intrinsic value to be A$0.87 per share in our base case scenario and A$0.95 per share in a more optimistic bull case. Our mid-point target price of A$0.91 highlights the significant upside potential, driven by the company’s scalable operations, strong leadership, and differentiated product portfolio.