This week’s trade alert is oversold in spite of a great earnings report and recent FDA clearance.
Nanosphere, Inc. (NASDAQ: NSPH)
September 8th, 2015 -Nanosphere Receives FDA Clearance for First-of-Its-Kind Flexible Respiratory Pathogens Test
August 10th, 2015 -Nanosphere Announces Record Q2 2015 Results-
Shares outstanding 7.38M
Insider and institutional ownership combined 57.7%
Revenue (TTM) $17.67M
Gross Profit (TTM) $5.79M
Quartely Revenue Growth 76.6%
Total Cash (MRQ) 20.8M
Book Value per share (MRQ) $2.90
Total Debt (MRQ) $15.24M
Chardan Initiates Analyst Coverage At Buy
After the announcement, Chardan analyst Keay Nakae initiated coverage on Nanosphere’s stock with a Buy rating and $3.30 price target. According to a note rolled out Tuesday, the company’s technology platform – the Verigene System, can assess highly complex “assays in human biology and infectious disease,” on a low-cost, easy to use platform, which allows for small laboratories and hospitals lacking “advanced diagnostic capabilities, to perform genetic testing.”
Biotech Is A Catalyst
Furthermore, the expert expounded, “This type of technology is facilitating the current conversion taking place in the market from traditional culture-based analytical methods to new molecular biology based on DNA, RNA, and proteins, which is being driven by the need for rapid and clinically actionable results that facilitate improved patient outcomes, and improved healthcare economics.”
Additional Catalysts For Nanosphere
Other elements that Nakae took into account when issuing a Buy rating included the potential to drive revenue growth that the company’s expanding customer base and menu of tests provide, in addition to the overly conservative estimates following a recent earnings miss.
The expert assured that Nanosphere looks like “an intriguing speculative micro cap investment story,” adding that he believes that “there could be substantial market demand for the company’s current menu of diagnostic tests, as well as other tests the company plans to develop” and that increasing revenue and widening gross margins should drive the stock price up going forward.
Top that off with an oversold chart ready to bounce- http://stockcharts.com/h-sc/ui?s=nsph
As you can see the very near term upside could be 30-50%.
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