Somnomed Limited (SOM) AI Stock Analysis

• Market Cap: AU$146.36M
• Dividend Yield: N/A
• Average Volume (3M): 705.41K
• Price to Earnings (P/E): 52.9
• Beta (1Y): 1.59
• Revenue Growth: 21.65%
• EPS Growth: 81.40%
• Country: AU
• Employees: 300
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): N/A
• Shares Outstanding: 218,443,250
• 10 Day Avg. Volume: 159,446
• 30 Day Avg. Volume: 705,406
• PEG Ratio: 0.48
• Price to Book (P/B): 2.97
• Price to Sales (P/S): 1.24
• P/FCF Ratio: 25.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$0.99
• Price Target Upside: 37.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: AU$0.71 ▼(-1.81% Downside)
• Action: Reiterated Date: 11/07/25
• Date: Action: Reiterated 11/07/25

Somnomed Limited's overall stock score is primarily influenced by its strong revenue growth and effective cash flow management, which are positive indicators. However, significant challenges in profitability and a bearish technical outlook weigh heavily on the score. The negative P/E ratio and lack of dividend yield further impact the valuation negatively.

Positive Factors

Revenue Growth

Sustained double‑digit revenue growth reflects expanding adoption by clinicians and greater market penetration of oral appliance therapy. Durable top‑line expansion improves operating leverage potential, supports continued investment in distribution and R&D, and underpins medium‑term cash flow outlook.

High Gross Margins

A ~60% gross margin provides a structural cushion that supports profitability as fixed costs scale. Strong product margin means incremental revenue can flow to operating profit once SG&A and R&D are contained, improving resilience and margin sustainability over the next several quarters.

Improving Free Cash Flow

A large improvement in free cash flow, and positive operating cash relative to net income, demonstrates the business can convert sales into cash despite accounting losses. This cash generation increases financial flexibility, funds operations and growth initiatives, and reduces reliance on external financing.

Negative Factors

Persistent Unprofitability

Despite healthy revenue and gross margins, the company reports negative net and EBIT margins, showing failure to translate product economics into bottom‑line profits. Continued operating losses can erode equity, limit reinvestment capacity, and require structural cost or pricing changes to restore long‑term profitability.

Negative Return on Equity

A negative ROE indicates the company is not generating returns on shareholder capital. With conservative leverage (debt/equity ~0.17), management has limited ability to boost returns via financial engineering, so improving operational efficiency or margin conversion is necessary to create lasting shareholder value.

Demand Sensitive to Reimbursement & Clinician Adoption

Revenue depends on dentist/sleep physician adoption, referral volumes and reimbursement/patient‑pay patterns. These structural external factors expose growth to regulatory, insurer and provider behavior shifts, making revenue and utilization vulnerable to policy changes or slower clinician uptake over the medium term.

Somnomed Limited Business Overview & Revenue Model

Company Description

SomnoMed Limited, together with its subsidiaries, engages in the production and sale of devices for the oral treatment of sleep related disorders in Europe, North America, and the Asia Pacific region. It offers SomnoDent, an oral appliance for obstructive sleep apnea; SomnoBrux, a dental guard for the treatment of teeth grinding damage; SomMorning Repositioner, which help return mandible back to its pre-treatment centric position; and SomTabs for cleaning oral devices. The company was incorporated in 1987 and is headquartered in Crows Nest, Australia.

How the Company Makes Money

Somnomed generates revenue primarily through the sale of its oral appliances, which are distributed to dental practitioners, sleep clinics, and healthcare providers across various regions. The company employs a direct sales model as well as partnerships with dental and medical professionals who prescribe its products to patients. Additionally, Somnomed benefits from recurring revenue streams through ongoing patient follow-ups, maintenance, and replacement of devices. Significant partnerships with healthcare organizations and adherence to regulatory standards further enhance its market positioning and contribute to its earnings.

Somnomed Limited Financial Statement Overview

Summary

Somnomed Limited shows strong revenue growth and effective cash flow management, indicating potential for future growth. However, profitability challenges, as evidenced by negative net profit margins and return on equity, are significant concerns. The balance sheet is stable with low leverage, but the lack of positive returns on equity needs addressing.

Income Statement

Somnomed Limited has shown a consistent revenue growth trend over the years, with a notable 11.22% increase in the latest period. However, the company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin remains strong at approximately 60%, suggesting effective cost management at the production level. Overall, while revenue growth is a positive sign, the persistent net losses highlight challenges in achieving operational profitability.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.17, indicating a conservative approach to leveraging. However, the negative return on equity suggests that the company is not generating sufficient returns on shareholders' investments. The equity ratio is stable, reflecting a balanced asset structure. While the low leverage is a strength, the inability to generate positive returns remains a concern.

Cash Flow

Somnomed Limited has demonstrated a significant improvement in free cash flow, with a growth rate of over 562% in the latest period. The operating cash flow to net income ratio is positive, indicating that the company is generating cash from its operations despite net losses. The free cash flow to net income ratio is also favorable, suggesting efficient cash management. Overall, the cash flow position is strong, providing a cushion against operational challenges.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	118.50M	111.49M	91.65M	83.62M	72.58M	62.71M
Gross Profit	68.02M	66.73M	55.13M	45.77M	39.15M	33.90M
EBITDA	4.18M	1.58M	-2.33M	698.39K	524.53K	3.57M
Net Income	-2.56M	-3.46M	-12.24M	-8.00M	-4.44M	-1.19M
Balance Sheet
Total Assets	79.90M	80.97M	69.80M	62.49M	58.09M	56.17M
Cash, Cash Equivalents and Short-Term Investments	18.03M	17.29M	16.18M	11.96M	15.64M	21.11M
Total Debt	14.01M	8.03M	6.72M	23.51M	12.01M	8.91M
Total Liabilities	29.86M	34.58M	24.78M	40.09M	30.31M	24.01M
Stockholders Equity	50.04M	46.39M	45.02M	22.40M	27.79M	32.16M
Cash Flow
Free Cash Flow	3.71M	5.36M	-7.72M	-10.29M	-6.93M	-1.43M
Operating Cash Flow	7.85M	7.78M	-6.33M	-3.88M	1.86M	2.71M
Investing Cash Flow	-5.98M	-3.98M	-5.34M	-6.41M	-8.47M	-4.37M
Financing Cash Flow	-1.56M	-3.38M	16.68M	6.61M	2.09M	-6.80M

Somnomed Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:SOM, the sentiment is Negative. The current price of 0.72 is above the 20-day moving average (MA) of 0.69, above the 50-day MA of 0.70, and below the 200-day MA of 0.73, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 49.70 is Neutral, neither overbought nor oversold. The STOCH value of 41.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:SOM.

Somnomed Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SOM	55 Neutral	AU$146.36M	52.88	-7.26%	―	21.65%	81.40%
4DX	53 Neutral	AU$2.32B	-3.16	-44.49%	―	55.91%	22.60%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
IPD	46 Neutral	AU$34.66M	-1.41	-74.00%	―	23.31%	-17.35%
CYC	44 Neutral	AU$97.09M	-6.27	-31.98%	―	34.20%	-23.90%
EMV	44 Neutral	AU$159.85M	-10.00	-70.55%	―	―	-257.32%
CMP	42 Neutral	AU$60.93M	62.66	-6.35%	―	2.23%	-263.16%

Somnomed Limited Corporate Events

SomnoMed posts record half-year revenue and boosts manufacturing capacity

SomnoMed reported record first-half FY26 revenue of $60.7 million, up 13% year on year, driven by double-digit growth in Europe and North America and stable margins at 61.3%. EBITDA rose 35% to $7.8 million as the company leveraged operating efficiencies while deferring some planned spending to the second half.

The group increased capital expenditure to $3.4 million to expand manufacturing capacity by more than 20%, aiming to meet peak demand while reducing reliance on overtime. Net cash improved to $17.3 million, and management reaffirmed full-year guidance for revenue of $119–126 million and EBITDA of $10–12 million, signalling confidence in sustained growth and operational resilience.

The most recent analyst rating on (AU:SOM) stock is a Hold with a A$0.74 price target. To see the full list of analyst forecasts on Somnomed Limited stock, see the AU:SOM Stock Forecast page.

SomnoMed Seeks ASX Quotation for 260,000 New Ordinary Shares

SomnoMed Limited has applied for quotation on the ASX of 260,000 new fully paid ordinary shares, to be issued on 13 January 2026. The additional securities arise from the exercise or conversion of existing options or other convertible instruments, modestly expanding the company’s issued capital base and potentially improving liquidity in its stock for existing and prospective investors.

The most recent analyst rating on (AU:SOM) stock is a Hold with a A$1.00 price target. To see the full list of analyst forecasts on Somnomed Limited stock, see the AU:SOM Stock Forecast page.

SomnoMed Options Lapse, Trimming Potential Future Capital Dilution

SomnoMed Limited has notified the market that 346,000 SOMAA options, which were due to expire on 24 June 2027 with an exercise price of $2.00, have lapsed as the conditions attached to these conditional rights were not satisfied. The cessation of these options, effective 31 December 2025, slightly reduces the company’s potential future issued capital and may marginally affect dilution expectations for existing shareholders, but does not directly alter current operations or cash position.

The most recent analyst rating on (AU:SOM) stock is a Hold with a A$1.00 price target. To see the full list of analyst forecasts on Somnomed Limited stock, see the AU:SOM Stock Forecast page.