NEW YORK (360Dx) – First Analysis Securities today downgraded NeoGenomics to Equal-Weight from Overweight based on the company's valuation.
First Analysis set a 12-month share price target of $11 for the company, which was trading at around $10 Wednesday morning. The price target translates to an enterprise value 3.5 times the firm's unchanged estimated 2019 revenue of $295.5 million. First analysis said that the valuation represents a premium to the approximately two-times multiple of NeoGenomics' "larger and slower growing peers" such as Laboratory Corporation of America and Quest Diagnostics, but a discount to Foundation Medicine's approximate 12-times multiple.
"Despite our move to the sidelines as a result of valuation, we continue to view the company positively due to its increased scale, geographic reach, and comprehensive test menu," analysts Joseph Munda and Tracy Marshbanks wrote in a research note. "Looking ahead, we believe this one-stop cancer testing shop is well positioned to grow its customer base of pharmaceutical customers, community-based pathologists, and clinicians, as well as enhance its reputation with existing clients as a leader in the field of molecular oncology," they wrote.
NeoGenomics on Tuesday reported revenues of $63.4 million in the first quarter of 2018, up 10 percent from $57.4 million in the same quarter last year, beating analysts' average estimate of $61.2 million. The company posted a net loss attributable to common shareholders of $2.4 million, or $.03 per share, down from a net loss attributable to common shareholders of $3.7 million or $.05 per share in the same period last year.