For folks with a tolerance for risk, life sciences company Bionano Genomics (NASDAQ:BNGO) is definitely worth a look. It takes guts to invest in out-of-favor assets like BNGO stock, but the long-term rewards could be substantial.
Just to recap, Bionano Genomics focuses on advancing genome mapping technology. The company has more than one product, but the best-known one is called the Saphyr system.
This is a “genome imaging tool for high-speed, high-throughput structural variant detection and analysis with exceptional sensitivity and specificity.” The Saphyr system is based on the idea that a range of conditions, including “cancers and developmental disorders,” can be detected quickly through “structural variations” in a patient’s DNA.
As we’ll discover, Bionano’s science is solid and the company’s financial data is better than you might expect. At the end of the day, you might just find a contrarian opportunity with this ambitious, future-facing diagnostics specialist.
BNGO Stock at a Glance
From 50 cents in December 2020 to a 52-week high of $15.69 in February 2021, BNGO stock sent the shareholders on a rapid and thrilling ride.
That run-up wasn’t meant to last forever, though. As the stock coughed up the majority of those gains, some folks learned a harsh lesson about gravity in the markets.
Before the end of February, BNGO stock broke below $10. Then, it was cut in half as the share price fell below the key $5 level in November.
In the final trading days of 2021, the Bionano share price was slightly above $3.
Yet, this opens the door to possible multi-bagger returns in 2022 as one Wall Street expert is modeling a comeback to almost the prior peak price.
Management Is Executing Its Objectives
Behind the stock’s volatility lies an “underappreciated message,” DeGeeter asserts. Even as the Bionano share price declines, DeGeeter feels that “Management is executing against the cytogenetics adoption thesis.”
The financial data seems to support the Oppenheimer analyst’s claim. During 2021’s third quarter, Bionano Genomics generated $4.7 million in revenues, indicating a 112% year-over-year increase.
Furthermore, Bionano’s balance sheet remained rock-solid as the company had $326.1 million in cash and short-term investments as of Sept. 30, 2021.
Plus, the company shipped 24 Saphyr systems to customers in Q3 2021, versus 11 systems shipped in year-ago quarter.
On top of all that, as DeGeeter points out, Bionano “is on track to meet or exceed its 2021 Saphyr placement goal of 150-plus.” So, it’s evident that the company is indeed executing on its objectives.
Still a Pioneer
Bionano Genomics has made considerable headway in advancing the Saphyr system. Nevertheless, the company still seeks to make further progress.
For example, Bionano recently completed the first prototype for its next single molecule imaging system for optical genome mapping.
This prototype is, according to the company, “being used to integrate and test the key engineering designs of a new instrument and consumable product.” Moreover, that product is intended to meet the needs of high-volume users.
Please note that this is not the Saphyr system. Rather, it’s a prototype for a next-generation commercial optical genome mapping system. The system based on this prototype is expected to be released during the first half of 2023.
The press release suggests that the new system could offer improved speed compared to the already-fast Saphyr system.
“Compared to the Saphyr system, which images DNA at a rate of approximately 205 Gbp per hour, the new system is expected to image nearly 820 Gbp per hour,” the press release explains.
The Takeaway for BNGO Stock
No doubt about it: 2021 wasn’t an easy year for BNGO stockholders. As such, I still give BNGO stock a “C” in my Portfolio Grader.
However, with a new year could come higher price points. Could DeGeeter’s $14 price target actually happen?
Anything is possible in the world of life sciences and genome mapping. So, if you can handle the risks, feel free to consider a long position in Bionano, a true genomics-field innovator.
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.
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