Little Caesar

While the entire wound treatment industry is in shock because Medicare is now paying 95% less for skin substitutes, there is one company that should see this as a massive tailwind. That company is Sanuwave $SNWV. They make a device that treats wounds pain-free (which is definitely not the industry standard), faster, and at a lower cost. Sanuwave's share price has declined about 60% recently, following the negative sentiment across the whole sector. The company currently trades at 15x earnings. To give you an idea of their growth, in Q4 '25 alone, they sold 20% of the total number of devices they currently have in use. They operate a razor-and-blade business model where they sell the device first and then charge for the disposable applicators that have to be bought for every treatment. There is a short-term headwind because some of their customers are going bankrupt due to the Medicare cuts. This means Sanuwave loses the recurring revenue from those specific companies as they wind down. However, since skin substitutes used to be extremely lucrative and now aren't, hospitals and physicians are looking for alternative ways to treat wounds. The number of patients needing treatment hasn't fallen, so the CEO calls this a "land grab" where the companies that can provide a fast solution will grow rapidly. They are already getting help from larger resellers than ever before, most of whom weren't interested in Sanuwave back when skin substitutes were the big money maker. One last note: their CEO is a hedge fund guy who is essentially betting everything on the company. He has 70% of his fund in it, takes a $1 base salary, and holds options that only realize if the stock price goes up. I wrote a longer write-up about Sanuwave on my Substack. Link in bio.

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