Is Bionano Stock a Buy Right Now? This Is What You Need to Know
Bionano Genomics (BNGO) didn't quite "beat earnings" when it reported its Q1 2021 results on Thursday last week -- and that's okay. Bionano posted a $9.9 million net loss for Read More... The post Is Bionano Stock a Buy Right Now? This Is What You Need to Know appeared first on TipRanks Financial Blog.
Bionano Genomics () didn't quite "beat earnings" when it reported its Q1 2021 results on Thursday last week -- and that's okay.
Bionano posted a $9.9 million net loss for the quarter, somewhat less than it lost one year previously, and in line with analyst estimates. Meanwhile, revenues nearly tripled to $3.2 million as the company enjoyed record sales of consumables and growth in the Saphyr installed base.
On the one hand, that's less good news than it may sound like -- sales actually declined 21% sequentially. On the other hand, the sales number didn't decline as much as analysts had feared, and the company also improved its gross profit margin on those sales by eight percentage points to 33%.
Investors by and large were pleased with Bionano's report, bidding the shares up more than 22% in Friday trading.
On a less positive note, Maxim analyst Jason McCarthy -- historically a bull on Bionano stock -- pulled in his horns a bit after hearing Thursday's news. McCarthy reiterated his "buy" rating on Bionano stock. At the same time though, he cut his price target on the shares from $14 to $10. (To watch McCarthy's track record, )
So what's curbing McCarthy's enthusiasm about Bionano?
It wasn't the business results per se. To the contrary, while acknowledging the sequential decline in revenue, McCarthy was pleased to observe that Bionano's Saphyr genomic optical mapping systems are winning market share among institutional buyers, giving rise to "increased demand for the reagent rental program and consumables," to higher sales in the consumables business, and improved gross margins on those sales. Bionano now has an installed base of 107 Saphyr units in the market, and aims to have 150 in place by the end of the year. The analyst also cited the "record number of flow cells sold and genomes analyzed through [Bionano's] services offering."
That being said, McCarthy seems to be concerned that there's less upside in Bionano stock today, than previously, given that the company took advantage of the share price's "significant" move higher in January and February to "smartly ... capitalize the company" by selling shares and raising cash. The plus side of this opportunistic move is that Bionano now has $362 million in its warchest -- enough to cover its cash needs for at least eight years at the company's current $44 million-ish annual cash burn rate. The minus side is that there are now many more shares on the market, divvying up future earnings such that each share outstanding now has a correspondingly smaller claim on such future profits.
Speaking of profits, McCarthy's latest prediction is for Bionano to report its first GAAP profit no sooner than 2024. Combine this expectation with "a peaking market in healthcare," "broad market headwinds" from the recent selloff in tech stocks, and profit taking among investors and, in McCarthy's view, while there's still "significant" upside remaining in Bionano stock, the profit potential is not quite as great as it once was.
Bionano has not attracted a lot of analyst attention, but those who have reviewed the stock agree with McCarthy's assessment. BNGO has a unanimous Strong Buy analyst consensus rating, based on 3 recent reviews. The stock’s $12 average price target suggests room for a 106% upside in the coming year. (See BNGO stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The post Is Bionano Stock a Buy Right Now? This Is What You Need to Know appeared first on TipRanks Financial Blog.