ASX:MVF
Monash IVF Group Ltd
Investment Summary
The fund managers believe that Monash IVF Group Ltd is a compelling investment opportunity due to a combination of favorable industry trends, robust market positioning, and an attractive valuation. They note a 3.5% increase in IVF cycles and positive Medicare data as key indicators of growth. Additionally, the demographic shifts in Australia and the increased demand for IVF services among diverse populations contribute significantly to future growth prospects. With a current valuation at around ~7.5x EBITDA and ongoing innovations in genetic testing and donor programs, Monash IVF is viewed as well-positioned to capture market share. The resolution of a class-action lawsuit further de-risks the investment, enhancing governance confidence. The managers also highlight potential upsides stemming from Monash’s discounted valuation relative to comparable transactions, suggesting it could be an attractive entry point. In their opinion, these factors collectively establish Monash IVF as a high-conviction investment with a strong risk-reward profile.
Commentary From The Managers
Cerutty Macro Fund
28 Feb 2025
$1.23
- Cerutty Macro Fund recognizes Monash IVF as a quality local name benefiting from uninterrupted tailwinds.
- Monash IVF holds a dominant market position with structural growth drivers and an attractive valuation.
- Demographic trends, including delayed marriage and childbirth, are boosting demand for IVF treatments.
- Growth in the LGBT community creates new markets for IVF services, especially in donor and surrogacy options.
- Australia's low birth rate is prompting government support through subsidies and regulatory easing in fertility treatments.
- Monash IVF trades at attractive multiples (~14.5x P/E, ~10.5x EBIT, ~7.5x EBITDA).
- Recent acquisition of Virtus Health provides a valuation benchmark, indicating upside potential for Monash IVF.
- Resolution of a class-action lawsuit de-risks the investment from a governance perspective.
- Monash IVF's competitive positioning is strengthened as Genea faces challenges from a data breach.
- Ongoing innovations in genetic testing, egg-freezing technologies, and donor programs enhance market appeal.
- In summary, Monash IVF presents a structurally attractive investment opportunity amid market volatility.
Endeavor Asset Management
31 Dec 2024
$1.27
- Endeavor Asset Management notes a 5.8% rise in shares of Monash IVF Group (MVF), supported by positive Medicare data.
- November IVF cycle data showed a 3.5% increase compared to the prior corresponding period.
- New data monitoring genetic testing, one of MVF’s key growth drivers, has been introduced.
- As awareness of genetic testing grows, MVF anticipates a significant proportion of individuals considering pregnancy will opt for at least three-gene testing.
- Endeavor Asset Management considers MVF’s 16x FY25 P/E to be attractive due to the Company’s defensive earnings profile.
- There are opportunities for further market share gains and favorable industry tailwinds.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.