To say it is all coming together nicely for Bionano Genomics (BNGO) would be a bit of an understatement. The life sciences company’s rise has been particularly eye-catching; Over the past 2 months, BNGO has surged by a breathtaking 2,344%.
Investors have evidently gotten wise to the opportunity Bionano represents in the world of cytogenetics and genomics, due to the potential of its genome imaging system, Saphyr.
Maxim analyst Jason McCarthy was an early supporter of the company while hardly anyone else was looking, and the recent surge in interest (and share price) has only confirmed his bullish call.
“Awareness, adoption and messaging in 2019 and 2020 culminated with a cytogenetics symposium that has opened the eyes of the genomics world to Saphyr, in our view,” the 5-star analyst said. “It’s never been about competing with sequencing (Saphyr is not a sequencer!), it’s about completing the genomic interrogation puzzle that sequencing cannot, and that’s the value in BNGO.”
The recently completed 5-day symposium had 33 presentations from “leading hospitals and medical research institutions” who have used Saphyr, and amounted to the largest showcase of the technology, so far. McCarthy notes the symposium highlighted “both the importance of Saphyr in genomics, and the platform adoption Bionano has driven over the past few years.”
Adoption – or reaching “critical mass” as McCarthy defines it – is a self-feeding loop. The increasing awareness of Saphyr will drive further adoption, which, in turn, will “drive revenue growth.”
However, while adoption has increased, the analyst warns of getting too far ahead, too soon, and losing sight of “the forest for the trees.” The analyst believes Bionano is not “quite ready to be benchmarked quarter-to-quarter.”
To attain “critical mass,” the focus this year should be on “working with end-users to develop additional tests for hematological malignancies, genetic disorders, and pre-natal testing, as well as other tests.” Furthermore, to speed up the switch to using Saphyr, a big priority should be reserved to working with end-users and payers to establish reimbursement for lab tests.
These goals should be easier to achieve, following two recent strategic equity financings which boosted Bionano’s balance sheet by $300 million.
So, all good news for Bionano, but what does it mean for investors? All in all, McCarthy reiterated a Buy rating and boosted his price target by a massive 600% from $2 to $14. Upside from current levels is 11%. (To watch McCarthy’s track record, click here)
2 other analysts have recently reviewed Bionano’s prospects, 1 concluding the stock is a Buy and the other saying Hold, all together coalescing to a Moderate Buy consensus rating. The incredible surge has left the analysts playing catch up; At $5.42, the average price target suggests shares will decline ~57% over the next 12 months. (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.
