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Capitalizing on its advanced understanding of human hearing, Sonic Innovations, Inc. (SNCI) has developed patented digital signal processing (DSP) technologies, and embedded them into the smallest single-chip DSP platform ever installed in a hearing aid. SNCI announced the launch of another version of it relatively new premium product line Velocity.
We previously increased our FY08 sales and EPS estimates. We previously lowered our FY09 sales estimate but increased our FY09 EPS estimate. The company finally gave up on Tympany and the referral concept, and instead has expanded its distribution relationships and is acquiring practices and opening new clinics to help drive meaningful sales growth from new product launches.
SNCI has been consolidating operations in Europe to reduce operating costs and to focus resources on markets that offer the greatest profitability. Our price target of $3.00 per share is based on a price-to-sales multiple of roughly 0.6x FY09 sales estimate.
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