SANUWAVE Health, Inc. (SNWV): A Bull Case Theory

We came across a bullish thesis son SANUWAVE Health, Inc. (SNWV) on @rationalformula on X(Twitter). In this article, we will summarize the bulls’ thesis on SNWV. SANUWAVE Health, Inc. (SNWV)’s share was trading at $27.97 as of 28th May. SNWV’s trailing P/E was 2.44 according to Yahoo Finance.

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An assembly line of medical devices being packed for distribution.

SANUWAVE ($SNWV) presents a compelling microcap investment opportunity with a rapidly maturing turnaround, a razor/blade business model, and strong operational momentum. The company’s flagship product, UltraMIST, is an FDA-cleared, non-contact ultrasound device for chronic wound treatment, reimbursed by CMS at $420 per use. With a growing installed base at over 900 sites, including the Mayo Clinic ICU, and over 60% of revenue now coming from high-margin consumables, SANUWAVE generates predictable, recurring income while physicians earn attractive margins on procedures.

After facing existential challenges—over 1B shares outstanding, debt default, and no cash flow—hedge fund manager Morgan Frank took the reins as CEO in May 2023, initiating a full-scale turnaround. A 1-for-375 reverse split, strategic PIPE financing, a restructured sales org, and Nasdaq uplisting have laid the groundwork for sustainable growth. Financials have rapidly improved, with FY 2024 revenue growing 60% to $32.6M and adjusted EBITDA reaching $7.2M. The company guided to 57–61% YoY growth in Q1 2025 and expects 50% of incremental revenue to fall to the bottom line.

At $30/share, the market cap is ~$255M with ~$25M in net debt, implying a ~$280M EV. Management projects ~$48–50M in 2025 revenue and ~$0.82 EPS, putting SNWV at ~36x 2025 earnings and just ~21x 2026 EPS. The company has a strong patent moat, sticky recurring revenue, and limited competition, with real near-term catalysts including litigation proceeds and insurer outreach. While CMS dependence and leverage are risks, execution thus far supports the investment case. SNWV is a profitable, fast-growing microcap with multi-year upside.

For a deeper look into another standout stock in the medical devices sector, we recommend checking out our article on Medtronic plc (MDT) wherein we summarized a bullish thesis by Magnus Ofstad on Substack.

SANUWAVE Health, Inc. (SNWV) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held SNWV at the end of the first quarter which was 0 in the previous quarter. While we acknowledge the risk and potential of SNWV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNWV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.