- After a sharp drawdown, Bionano Genomics stock is trading at a deep discount.
- The company has demonstrated revenue growth and is working diligently to address a significant medical niche market.
- Investors should be patient and give Wall Street time to re-rate Bionano Genomics.
California-headquartered life sciences company Bionano Genomics (NASDAQ:BNGO) just can’t seem to get any respect among the investing community lately. There have been good days here and there, but on the whole, BNGO stock has been on a confirmed downtrend.
The company is known for introducing the Saphyr system. Bionano Genomics describes this as a “genome imaging tool for high-speed, high-throughput structural variant detection and analysis with exceptional sensitivity and specificity.”
The way Wall Street has been treating BNGO stock, you’d think that the company hasn’t sold any Saphyr systems at all. Yet, the data will prove that this is far from the case.
Not only that, but Bionano Genomics is boldly addressing a class of diseases that may be under-treated in the medical community. This should, in due time, prove to be a win-win for the patients and for Bionano’s shareholders.
What’s Happening with BNGO Stock?
As recently as Nov. 15, 2021, BNGO stock was trading at $5. Unfortunately, the share price has been cut in half since that day.
Mar. 1 should have been the day of a major share-price turnaround. That is when Bionano Genomics published its full-year 2021 financial results.
If stock traders were perfectly rational, then they would have read the great news and pushed up the BNGO stock price. However, the financial markets are far from perfectly rational.
Consider these statistics and you might agree that the Bionano Genomics share price ought to be much higher. For one thing, the company’s 2021 revenue grew 111% to $11.695 million. Next, Bionano ended 2021 with a firm balance sheet, showing cash and cash equivalents totaling $24.571 million.
Plus, there is another highlight worth mentioning. Remember, Bionano’s flagship product — the real moneymaker — is the Saphyr system.
At the end of 2021’s fourth quarter, Bionano Genomics expanded its installed base of Saphyr systems to 164. This represents good progress compared to the 141 Saphyr systems at the end of the third quarter.
Being Part of the Solution
Slowly but surely, the Saphyr system is gaining traction — and BNGO stock ought to reflect this in the near future. Truly, a return to the $5 level isn’t too much to ask for.
Besides, Bionano Genomics is showing the medical community the diverse applications of its breakthrough genomics technology.
As evidence of this, the company has launched a rare undiagnosed genetic disease (RUGD) strategic initiative. This is a timely and critical effort, as more than 7,000 rare diseases have been identified. Unfortunately, an estimated 25 million Americans and 30 million Europeans are living with a rare disease.
If any small biotechnology company can be part of the solution, it is Bionano Genomics. According to the press release, around “80% of rare disease are believed to be caused by genetic factors” — and the Saphyr system has the potential to quickly and accurately detect a range of rare diseases.
As the company points out, with standard techniques, it takes an average of seven years to obtain an accurate diagnosis for rare diseases. With Bionano’s RUGD program, modern technology could potentially reduce this time lag, and possibly even save lives.
What You Can do With BNGO Stock
Patience will be the key to success as a BNGO stockholder. $5 should be a long-term price target, not a short-term fantasy.
Fast-growing revenue and more installations of the Saphyr system ought to boost the shareholders’ confidence as they wait for Wall Street to appreciate Bionano’s efforts.
Furthermore, Bionano Genomics is spearheading an important initiative that could help to diagnose an array of rare diseases. Therefore, the stockholders can choose to stay the course, as Bionano deserves a positive re-assessment from investors this year.
On the date of publication, David Moadel 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.