Admittedly, it has been a while since Bionano Genomics (NASDAQ:BNGO) stock has been a “hot stock,” a “meme stock” or whatever you want to call it. Since its big drop in late February and early March, the market has had mixed feelings about this life sciences company.
Their view? On one hand, it has big potential with its Saphyr optical genome mapping instrument. That’s why, as a result of a spate of positive developments, shares skyrocketed in value around the start of 2021. On the other hand, something else may or may not have played a role in the nearly twenty-fold run-up in BNGO shares. That would be the meme stock trend.
With this, it makes sense why some may see it as an overhyped meme stock itself. That’s why it has stayed stuck at present levels for several months. Meme stock status, plus the fact that it’s priced entirely on future potential may explain why it’s also a stock with a moderately high amount of short interest (around 14.5% of outstanding float).
However, much suggests it’s more than a mere meme stock.
In fact, BNGO stock has the makings of a long-term winner. As such, it’s best to ignore the skeptics. Although it’s struggling now to bounce back, due to low confidence in its future, now’s the time to take advantage of its mispricing.
Here’s why you should consider Bionano a buy at today’s prices (around $5 per share).
Investors Shouldn’t Underestimate BNGO Stock
Let’s assume that the meme stock trend played a role in its wild moves earlier this year. With this, it makes sense why many in the market aren’t willing to hop back into it. By benefiting from the phenomenon, the market takes this to mean there’s more hype than substance with this situation.
Yet nothing could be further from the truth when it comes to BNGO stock. First, as the company argued late last year that the Saphyr, with its optical genome mapping, has proven to be a more accurate and less expensive alternative to traditional sequencing methods.
Second, based on its success so far with the rollout of Saphyr, expect it to continue seeing strong revenue growth. Both when it comes to new installations, as well as with sales of the nanochannel array flow cells that are used with the system.
Third, with its recent deal to buy BioDiscovery, Bionano gains a lot that could help enhance the appeal of Saphyr. It could also accelerate how quickly it takes off in usage worldwide. That said, this recent M&A (mergers and acquisitions) deal may not mean a “liftoff” for shares will happen soon. Even so, it may be more than worth the wait.
The Next Bionano Breakout Will Take Time to Happen
The good news with BNGO stock is that the crowd is wrong in writing this off as just a meme stock. The bad news? Unlike before, it’ll take some time for it to make its next big move higher. How so? For starters, it needs to demonstrate to Wall Street that it’s the strong sales growth seen in the past three quarters continues.
Right now, there are doubts about its ability to maintain (or grow) its recent new installation numbers. But based on other recent developments, like the adoption of Saphyr by molecular diagnostics company NuProbe Global, it’s hard to imagine slowing down instead of speeding up going forward.
In short, I believe the company has high chances of proving those bearish on the stock wrong.
Once it manages to quiet down its skeptics? Bionano Genomics shares will start to get out of their current rut. It’ll start breaking out of its current $5-$6 per share trading range. After that, it’ll be up to other factors to help fuel its possible move back to around $15 per share.
For instance, initial success from the BioDiscovery deal, once it closes. If the deal provides Bionano with the synergies, technology, as well as the talent needed to “level up” its operations? Investor confidence should see another uptick, and so will shares.
The Verdict
Bionano Genomics may have first appeared on most investors’ radars as a meme stock play. But in contrast to many names in that category, the future potential with this “future of genomics” play is pretty clear.
As it makes further improvements to its platform, and as end-users around the world become more interested in employing it? Investor enthusiasm for this name will return. Yes, perhaps at a pace much slower than what played out earlier this year.
It may take time for it to potentially move back to its all-time high of $15.69 per share. But given that’s nearly triple what it trades today, patience could pay off big with BNGO stock.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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