On Tuesday, Roth/MKM maintained a Buy rating on ChromaDex Corp (NASDAQ:CDXC) and increased the share price target to $6.00 from the previous $4.25. The firm's stance comes as a response to the company's recent stock performance and market opportunities.
ChromaDex, known for its Tru Niagen product, has seen its share price climb sharply in recent weeks, but analysts at Roth/MKM believe the stock still holds value that has yet to be fully recognized by the market.
The firm's analysis suggests that despite the recent uptick, ChromaDex's valuation does not fully account for its potential. The analyst pointed to several factors that could contribute to further growth, including the expansion of Tru Niagen, the development of new products in adjacent markets, and the possibility of forming licensing or supply partnerships with pharmaceutical companies.
Roth/MKM's confidence in ChromaDex is underpinned by a review of transactions in the health and wellness sector. These transactions indicate that companies in this space, particularly those with strong growth opportunities like ChromaDex, can be undervalued by the market. The firm believes that the breadth of opportunities available to ChromaDex has not been adequately factored into its stock price.
The analyst's statement highlighted the company's potential in the health and wellness industry.
"After reviewing several transactions concluded in recent years in the health and wellness arena, we believe CDXC's stock price does not give sufficient credit to the breadth of opportunities for growth of Tru Niagen, for development of additional products in adjacent markets, or for the potential of licensing and/or supply partnerships with pharmaceutical companies." Said the analyst.
With this outlook, Roth/MKM has reaffirmed its Buy recommendation for ChromaDex and adjusted the price target upward to reflect the company's growth prospects. The new target represents a significant increase from the previous figure, signaling a positive outlook for the company's financial future.
InvestingPro Insights
Recent metrics from InvestingPro provide a deeper dive into ChromaDex Corp's (NASDAQ:CDXC) financial and stock performance. The company's market capitalization stands at approximately $317.75 million, indicating a substantial presence in the health and wellness sector. Despite a challenging earnings landscape, with a negative P/E ratio of -64.09 reflecting current unprofitability, the company has demonstrated impressive revenue growth over the last twelve months as of Q4 2023, at nearly 16%. This growth is a testament to the company's expanding market reach and the increasing popularity of its Tru Niagen product.
InvestingPro Tips highlight the stock's significant return over various periods, with a remarkable 190.34% return over the last year, and a 17.27% return in just the past week. These figures underscore the stock's strong performance and the market's positive reaction to the company's strategic initiatives. However, it's important to note that the stock is currently considered to be in overbought territory according to the RSI, a signal for potential investors to be cautious of short-term price volatility.
For those considering an investment in ChromaDex, the InvestingPro platform offers additional insights and tips, with a total of 13 InvestingPro Tips available that can help inform your investment decisions. To access these tips and gain a comprehensive understanding of CDXC's potential, visit https://www.investing.com/pro/CDXC and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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