The Polynovo Ltd (ASX: PNV) share price is having another tough session.

At the time of writing, the ASX 200 healthcare stock is down 16.5% to $1.49.

This means that the medical device company's shares are now down 24% over the past two trading sessions.

Why is this ASX 200 healthcare stock crashing?

Investors have been rushing to the exits since the release of PolyNovo's half year results on Monday.

For the six months ended 31 December, the ASX 200 healthcare stock reported a 28.1% increase in sales to a record of $54.1 million. This was driven by a 27.9% increase in US sales to a record of $41.2 million and a 28.6% lift in Rest of World (ROW) sales to $12.9 million.

On the bottom line, PolyNovo recorded a 23.9% increase in net profit after tax to $3.3 million.

But taking the shine of the result was its free cash flow generation. Despite its strong growth, PolyNovo posted a sizeable $12.5 million operating cash outflow for the half.

Commenting on the result, the ASX 200 healthcare stock's CEO, Swami Raote, said:

We continue to redefine healing in the world of acute complex wounds. I could not be more pleased with our results and global patient impact. Our Surgeons continue to support us in innovating, educating, building our new products pipeline and expanding our usage. We are balancing our efforts in US and Rest of World – in US, we will continue to take share away from established incumbents, while forging into new areas of treatment.

In ROW we are now driving procedure and market development efforts. NovoSorb as a platform has a generational opportunity to transform and improve access and outcomes for Plastic and Reconstructive Surgery spectrum, over time providing easy access to solutions for Trauma and General Surgeons in regional centers. With our Surgeons, we are focused on building products and procedures which help provide meaningfully differentiated patient outcomes.

No guidance was given for the remainder of the year.

Broker reaction

Bell Potter thinks investors should look beyond the cash outflow and lack of guidance and focus on its strong overall result. It said:

As revenues had been pre-released, the negative share price (down 8%) reaction following the result announcement was most likely attributable to the poor cash flow (net operating cash out flow $12.5m). There was no guidance and no specifics for growth expectation in 2H25 and we expect these factors left the market without direction.

According to the note, the broker has retained its buy rating with a trimmed price target of $2.80 (from $3.00).

Based on its current share price, this implies potential upside of over 80% for investors over the next 12 months. It concludes:

The growth strategy for PNV remains firmly in place. Target price is reduced to $2.80 (from $3.00) and we retain our Buy recommendation. FY25 revenues downgraded Buy 7%, however, double digit growth expectations remain.