Compumedics Limited [ASX:CMP] Update August 2025
Healthcare & Biotechnology
Global Growth Accelerates with Major Wins in China & US
We update Compumedics (ASX: CMP) with a revised Target Share Price of $0.75, which represents a total upside potential of 138.7%, reflecting a significant increase from the current share price of $0.315 and a 11.9% increase from the previous Target Share Price of $0.67 from our initiation report from March this year. This re-rating reflects CMP's achievement of several key milestones, including record sales orders of $63.4 million in FY25, the successful validation of its world-first dual-use Orion LifeSpan™ MEG system, and strategic commercial wins such as long-term distribution agreements in China and a major Somfit contract with a leading US pharmaceutical CRO. These developments not only strengthen CMP's position in high-growth segments like SaaS and brain imaging but also significantly de-risk its revenue outlook and enhance its value proposition in the global medtech and connected health markets.
$24.4M China Deals Secure Multi-Year Revenue Pipeline
CMP has secured two new long-term distribution agreements in China, collectively valued at A$24.4 million. The first, worth AS20 million, extends its partnership in Northern China focused on sleep diagnostics, while the second A$4.4 million deal renews a relationship in Eastern China covering sleep and neurology. Both agreements include a minimum 10% annual growth commitment, providing strong multi-year revenue visibility. This strengthens CMP's position in one of its most strategically important markets and supports its broader international growth strategy.
CMP Delivers Record Sales and Reaffirms Strong FY26 Outlook
CMP delivered record FY25 sales orders of $63.4 million (+22% YoY), driven by strong growth in US Sleep Diagnostics (+102%) and a sharp rise in Somfit US orders (+675%). Despite revenue timing delays, reported revenue reached $51.0 million and the company returned to profitability with ~ $3 million EBITDA. FY26 guidance remains robust with at least $70 million in revenue and $9 million EBITDA, supported by the US launch of Somfit D, rising SaaS contributions, and the delivery of three MEG systems. SaaS is expected to contribute over 20% of total revenue, positioning CMP for continued high-margin, scalable growth.
Somfit Secures $1M Order from Leading US CRO
CMP secured a US$1 million Somfit contract with a top-tier US pharmaceutical CRO, marking a strategic entry into the clinical trial space. The deal highlights Somfit's advanced EEG-based capabilities and reinforces CMP's expansion into high-margin, adjacent markets beyond traditional sleep diagnostics.
Valuation Update Supported by Strengthening Fundamentals and Global Expansion
We update our valuation for CMP to $0.59 per share in the base case and $0.92 in the upside case with a Price/NAV of 0.42x. Key catalysts for CMP's re-rating include the commercialisation of the Somfit platform, entry into pharmaceutical trials, validation of the Orion LifeSpan™ MEG system, and new multi-year distribution agreements in China. The company's return to profitability, strong FY26 guidance, and growing US presence further support its high-margin, scalable growth trajectory. Risks include delays in revenue recognition, execution risk in MEG deliveries, and slower Saas adoption. Regulatory and FX uncertainties, along with capital requirements, may impact near-term performance. However, CMP remains well-positioned for long-term value creation.