NEW YORK – BTIG on Friday initiated coverage of Progenity with a Buy rating and a price target of $12 per share.
Progenity is a leading provider of noninvasive prenatal testing and carrier screening, wrote BTIG Analyst Sung Ji Nam in a research note to investors. Recent positive news for the company have included updated guidelines from the American College of Obstetricians and Gynecologists recommending NIPT for all pregnancies regardless of risk, as well as the planned launch of an updated version of the firm's NIPT test next year. Nam said medium-term revenue growth in the low teens is "well within reach" for the company.
Progenity also has a preeclampsia test in the works, which Nam said "has the potential to address a significant unmet need in a market segment highly underserved in terms of diagnostic solutions." In addition, the firm is developing an ingestible technology platform that Nam called the firm's "highest risk/reward opportunity."
Currently, Progenity's shares are trading significantly below its IPO price of $15, likely as a result of COVID-19 headwinds, legacy billing practice scrutiny, and litigation settlement accruals impacting revenues, Nam added. Potential investment risks include a slowdown in the base business as a result of slower payor adoption of NIPT for average-risk pregnancies, market share loss due to competitive forces, and the inability to execute product launches.
BTIG's forecast for Progenity's FY2020 revenues is $95.54 million. Its coverage of the company follows that of Piper Sandler, which initiated coverage of Progenity in July with an Overweight rating.
In early morning trading Friday on the Nasdaq, Progenity's shares were up nearly 3 percent to $8.01.