Investors seeking a potentially explosive play in the growing genomic mapping sector ought to consider Bionano Genomics (NASDAQ:BNGO) stock.
Readers are generally aware that scientific advancements are making it more possible to understand the genetic information inside each individual. It’s clear that the industry represents a massive opportunity. It’s fair to assert that most people want to know more about their own unique genome and what that means for them. The more we know about our own predispositions, the better we can react as the theory goes.
Firms with products and services that facilitate genomic mapping should then be highly interesting. Especially when those firms are underpinned by attractive fundamentals. That’s the case with BNGO stock, which is why it’s worth considering.
The first thing to understand about Bionano Genomics is the product and services it offers. That begins with the Saphyr system. It is a high throughput genomic mapping system, which is sold institutionally.
The price of the Saphyr system begins at $150,000. As you might imagine, that isn’t going to make the system attractive to individual buyers. That’s really not the point anyway. The Saphyr system is only practical for large-scale, institutional genomic mapping.
The company brochure states that it costs “$450 per genome with 240 genome bundle.” I believe that means for institutions that outlay the $150,000 for the Saphyr system, they also pay an additional $108,000 ($450 x 240 genomes) as one option.
If I’m understanding correctly, that would allow institutions to begin mapping 240 individual genomes for roughly $260,000.
Rental and Data Options
For smaller operations, that initial cost might make the system unattainable. In such cases, Bionano Genomics also offers rental options in which their team installs the Saphyr system in-house.
It isn’t particularly cheap either. It costs $550 per genomic test run and renters have to commit to 120 genome tests every six month rental period. That translates to a $66,000 expense in those six months. However, the lowest commitment service Bionano Genomics offers is individually submitted samples. The firm’s data service allows individual submission of certain tissue types costing between $950 and $1150 or higher depending on the image resolution required.
Investors should logically wonder how much of a market exists for such a cutting edge, expensive product and service set.
The Genome Market Is Growing
Fortunately, the news looks promising on that front. The company recently released a set of preliminary Q4 and full-year results.
Bionano Genomics appears to be doing quite well. In Q4 the firm anticipates that it will report between $5.8 to $6.2 million in revenues. Sequentially that will represent a 45%-55% increase on a year-over-year basis.
Investors should also be encouraged that Bionano Genomics found a strong sales base for their Saphyr systems, which cost a minimum of $150k. It currently boasts an installed base of 164 Saphyr systems, 69% more than it had in 2020.
There’s even more good news. Per the news release: “Bionano also reported a record net increase in the installed base of 23 Saphyr systems in the fourth quarter of 2021.” That suggests that the firm is gaining momentum in selling its products.
This leads me to another point potential investors should understand: It is still early in the game.
BNGO stock trades for $2.07 as I write this article. Yet, it remains very well regarded by the four analysts currently covering it. All of them rate it a buy, giving it a $11.38 average target price.
The appeal is obvious based on those ratings, but remember to think bigger. Consumers, meaning you and me, are demanding to know more about our respective genetic makeup. That requires increasingly complex technology. The Saphyr system is precisely that. Bionano Technologies hasn’t carved out a massive piece of the market yet, but that doesn’t mean it won’t in the future.
On the date of publication, Alex Sirois did not have (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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.