The last few months have been a breakout period for Bionano Genomics (BNGO). The share price has gone stratospheric as investors have cottoned on to the potential of its genome imaging system, Saphyr, and the impact Bionano can have in the world of cytogenetics.
Oppenheimer analyst Kevin DeGeeter believes technical developments could lead to reduced COGs (cost of goods sold) per genome, which in turn could help the next-gen platform gain “deeper market penetration.”
“Since the 2017 launch of Saphyr, there has been steady improvement in both laser optics and photon capture components from OEMs,” the 5-star analyst said. “BNGO is launching an aggressive initiative to combine these improved components with new informatics workflow to support a stepwise increase in throughput from 5,000 genomes per year to 68,000 (four modules @ 17,000) and chip cost from $500 to $100 per genome.”
While cytogenetics remains the bull case’ main driver, the optical imaging platform’s addressable market could expand via newly planned studies in other verticals including prenatal, pediatrics, hematology and solid tumors.
DeGeeter also believes the recent equity raises which totaled more than $380 million give the company “balance sheet flexibility.” Therefore, the analyst is more focused on the company’s progress than near-term revenue prospects. The strengthened balance sheet allows Bionano to “aggressively invest in both commercial infrastructure expansion and next-generation optical imaging technologies.”
DeGeeter thinks that by 2026, 3 full years into the launch of a “next-generation platform offering up to 80% reduction in per genome disposable cost,” the company can deliver revenue of $353.1 million. Overall, the analyst estimates the cytogenetics TAM (total addressable market) could reach more than $1.5 billion.
To this end, DeGeeter reiterates a Buy rating on Bionano shares and boosts the price target up from $1.5 all the way to a Street high of $15. Investors could be pocketing gains of 29%, should DeGeeter’s thesis play out over the coming months. (To watch DeGeeter’s track record, click here)
That’s Oppenheimer’s take, what about the rest of the Street’s view? 2 other analysts agree by providing additional Buy ratings, while one Hold can’t detract from a Strong Buy consensus rating. However, the $10.94 average price target is dragged down by the latter’s depressed objective, and therefore, shares are anticipated to remain range-bound for the foreseeable future. (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.
