On Wednesday, Lake Street Capital Markets updated its outlook on shares of Personalis (NASDAQ:PSNL) shares, raising the price target to $9.00 from the previous $7.00 while upholding a Buy rating.
The firm's analyst cited an impressive 2024 for the company, marked by the successful adoption of its "Win in MRD" strategy and a promising future trajectory. The optimism appears well-founded, as InvestingPro data shows the stock has delivered an exceptional 173% return over the past year, with particularly strong momentum in recent months.
Personalis witnessed a significant increase in testing volumes, bolstered by the expansion of the NeXT Personal Dx early access program in collaboration with Tempus. The company also strengthened its position through the extension of its agreement with Moderna (NASDAQ:MRNA) and a $50 million strategic investment from Merck (NS:PROR), which Lake Street views as a strong endorsement of Personalis' endeavors.
According to InvestingPro analysis, the company maintains a strong financial health score, with liquid assets exceeding short-term obligations and a comfortable current ratio of 4.68.
The fourth quarter of 2024 saw revenue growth primarily driven by Natera (NASDAQ:NTRA), but Lake Street emphasized the importance of Personalis' strategic initiatives moving forward.
Management at Personalis is optimistic about obtaining reimbursement for at least two of its three leading indications—lung, breast, and immunotherapy monitoring—within the year. The firm is also anticipating the publication of data that should aid in the reimbursement process.
Lake Street believes that Personalis is at a critical juncture, with sufficient cash to reach breakeven, a solid commercial partnership, compelling clinical data, and the prospect of securing multiple reimbursement approvals. The firm expects 2025 to be another transformative year for Personalis and has adjusted the price target to reflect the increased cash and shares following Merck's strategic investment.
With a market capitalization of $422.48 million and revenue growth of 24% in the last twelve months, the company shows promising momentum. Analyst consensus remains strongly bullish, with targets ranging from $5 to $10.67. For deeper insights into Personalis's financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Personalis, Inc. has been making significant strides. The company reported a substantial 41% increase in year-over-year revenue for the third quarter of 2024, reaching $25.7 million, largely due to a 96% surge in biopharma sector revenue. However, Personalis anticipates a decrease in Q4 revenue to between $15 million and $16 million, primarily due to a reduction in revenue from Moderna and Natera.
In addition to these financial developments, Personalis has amended its At-the-Market Sales Agreement, introducing Piper Sandler & Co. as an additional sales agent alongside BTIG, LLC. This amendment allows Personalis to issue and sell shares of its common stock directly on the Nasdaq Global Market.
Furthermore, Personalis has secured an investment from Merck and extended its collaboration with Moderna. Analysts from H.C. Wainwright have responded to these developments by increasing the price target for Personalis shares to $11.00, while maintaining a Buy rating.
The partnership with Moderna focuses on the use of Personalis' ImmunoID NeXT Platform in the ongoing development of an investigational individualized neoantigen therapy, a novel approach to cancer treatment. These are the recent developments for Personalis, Inc.
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