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The shares of NeoGenomics (NEO -37.4%) have reached over a three-year low on Tuesday after the operator of most cancers testing labs introduced the departure of its Chief Government and pulled its 2022 steerage.
Noting the dearth of visibility on the corporate’s prospects after the event Financial institution of America downgraded the inventory to Impartial from Purchase.
At a gathering, NeoGenomics (NASDAQ:NEO) administration identified that its core oncology check volumes haven’t recovered as anticipated whereas there have been some further headwinds from the pandemic in 1Q, in keeping with the analysts led by Derik de Bruin.
The administration “is uncertain why, however famous that they see this as extra of a NEO particular difficulty vs. an trade huge downside,” they added.
The value goal slashed to $18 from $25, is predicated on 4x of the agency’s 2023E EV/Gross sales forecast, decrease than the corporate’s 4-year common.
Moreover, Cowen and Needham additionally minimize their value targets on NeoGenomics (NEO) to $24 from $42 and $18 from $25, respectively. Each companies have Purchase-equivalent scores on the inventory.
“Following information of a sudden CEO departure, restricted visibility on new rent timing, a 1Q miss and pulling ‘22 steerage, NEO’s inventory was down sharply and efficiency is more likely to stay muted till confidence is restored,” Bloomberg reported quoting Cowen analyst Dan Brennan.
In the meantime, Needham’s Mike Matson factors to potential penalties of the event. “NEO’s poor outcomes and inventory efficiency might make it susceptible to an activist shareholder and/or an acquisition. Particularly, we consider that activist might push for improved profitability and/or a sale of the corporate,” he famous.
In search of Alpha contributor, Out of Ignorance issued a Maintain ranking on NeoGenomics (NEO) in December, arguing that the corporate in a rush to launch sure applied sciences it acquired in 2020, was “taking large dangers.”
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