On Friday, Roth/MKM maintained a Buy rating and an $8.00 price target for ChromaDex (NASDAQ: CDXC) shares, following a recent amendment to its agreement with Dartmouth College. The stock has experienced significant volatility recently, with a -13.73% decline over the past week, despite an impressive 365.73% year-to-date return according to InvestingPro data.
In a filing on Thursday, December 4, 2024, ChromaDex updated its 8-K to reflect that it will no longer be required to pay Dartmouth College $3.5 million in previously accrued but unpaid licensing and royalty fees. Furthermore, the company is mandated to post an Appeal bond that matches the judgment fees related to the patent infringement case against Elysium Health, Inc.
The analyst from Roth/MKM expressed a strong belief that the amendment is beneficial for ChromaDex, considering the recent price drop as an opportunity for investors to buy. The firm addressed concerns stating that there seems to be a misinterpretation of the 8-K filing, which led some to believe ChromaDex would incur financial liabilities due to the changes in its agreement with Dartmouth College.
The analyst clarified that the amendment should have a positive immediate financial impact on ChromaDex and is unlikely to cause any significant negative financial consequences in the long run.
The reiteration of the Buy rating suggests confidence in the company's stock performance despite the recent developments. InvestingPro data supports this view, showing the company maintains strong financial health with a current ratio of 2.95 and operates with moderate debt levels. Discover 15+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The agreement amendment with Dartmouth College and the requirement to post an Appeal bond are part of ChromaDex's ongoing legal proceedings. The analyst emphasized that the market's reaction to the 8-K filing was unwarranted, and the company's financial position is stronger as a result of the updated agreement.
In summary, Roth/MKM stands by its assessment that the amendment to the agreement with Dartmouth College presents a net positive outcome for ChromaDex. The firm encourages investors to view the current price weakness as a chance to invest in the company's stock.
While analysts maintain a bullish outlook, InvestingPro's Fair Value analysis suggests the stock is currently overvalued. For deeper insights and access to the comprehensive Pro Research Report covering ChromaDex and 1,400+ other stocks, consider subscribing to InvestingPro.
In other recent news, ChromaDex Corp. has reported a 31% increase in total net sales, reaching $25.6 million in its third-quarter financial report, primarily due to the sales of its flagship product TRU NIAGEN and NIAGEN ingredient.
Following this growth, H.C. Wainwright upgraded the 12-month price target for ChromaDex to $8.00, maintaining a Buy rating on the stock. The company also announced an amendment to its "at-the-market" equity offering program, adding Roth Capital Partners (WA:CPAP) as a new sales agent and removing B. Riley Securities, Inc.
ChromaDex has expanded the availability of its advanced NAD+ therapy, Niagen IV, to over 200 Restore Hyper Wellness locations across the United States. The company also welcomed a new CFO, Ozan Pamir, who brings significant experience from his previous position as CFO of 180 Life Sciences. ChromaDex also announced a change in its certifying accountant due to Marcum LLP's upcoming merger with CBIZ Inc (NYSE:CBZ)., citing independence concerns.
In terms of product development, ChromaDex successfully launched the Niagen Plus product line and is expanding the distribution of its Niagen product to 14 additional wellness clinics across the United States, in collaboration with Wells Pharma of Houston. These are the recent developments in ChromaDex's ongoing efforts to grow and innovate in its sector.
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