Echelon Capital Markets analyst Stefan Quenneville has reiterated his positive outlook on Diagnos (TSXV:ADK), maintaining a “Speculative Buy” rating and a one-year price target of $1.00. Quenneville’s analysis suggests a potential return of 88% for investors.
Diagnos signed a memorandum of understanding (MoU) with EssilorLuxottica, the world’s largest eye care company, in August 2021. Quenneville expects this understanding to evolve into a contract, leading to the commercialization of Diagnos’ AI-based FLAIRE platform, which screens for Diabetic Retinopathy (DR). Diabetic Retinopathy is the leading cause of adult blindness, and early detection is crucial for effective treatment. Diagnos’ platform integrates with existing optometry cameras and workflows, enabling accurate and efficient detection, grading, and monitoring of DR.
Quenneville highlights the challenges associated with current manual approaches to DR screening, including bottleneck issues and time constraints. By providing an equipment-agnostic solution, Diagnos aims to address these challenges and improve the efficiency of DR diagnosis.
Although Diagnos is currently expected to generate negative EBITDA of $2.0 million on revenue of $500,000, Quenneville predicts improvements in the company’s financials. He anticipates a decrease in negative EBITDA to $1.8 million, accompanied by a significant increase in revenue to $1.6 million.
The agreement between Diagnos and EssilorLuxottica presents a significant growth opportunity for Diagnos, allowing it to expand its presence in up to 8,000-10,000 EssilorLuxottica locations globally. The partnership aims to address the undetected progression of DR, enabling prompt diagnosis and intervention to prevent irreversible vision loss.
With the future potential offered by the agreement and the positive outlook from Echelon Capital Markets, investors may find Diagnos a compelling investment opportunity.
– Memorandum of Understanding (MoU): A formal agreement between two parties that outlines their intention to enter into a future contract or partnership.
– Diabetic Retinopathy (DR): A diabetes-related complication that affects blood vessels in the retina, potentially leading to vision impairment or blindness.
– EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company’s operating performance and financial health.
– Revenue: The income generated by a company from its business activities.
Sources: This article was based on information from a research update by Echelon Capital Markets on Diagnos (TSXV:ADK).