I am still keeping my eye on this one because if even 75% of what they once promised was accurate it should still be a big winner. But at this point it seems more faith than anything else.
- Shares of genetic analysis and testing firm Sequenom (SQNM) are up $1.56, or 22.5%, at $8.48, after Cantor Fitzgerald analyst Pamela Bassett raised her rating on the shares to “Buy” from “Hold,” saying she has renewed confidence, after meeting with management, that the company is on track to develop non-invasive diagnostic tests. Bassett raised her price target to $16 from $4. Bassett’s note follows on an upgrade yesterday to “Hold” from “Sell” by Hapoalim’s Raghuram Selvaraju.
- Bassett values the company as a combination of a 36 times P/E on estimated 2011 earnings and an enterprise value-to-revenue multiple of four times, and a pretty high discount rate of 25% to account for risks around the company building out commercial lab facilities for its tests, building its sales force, and other endeavors.
- After an expected off of $67 million this year and $44 million next year, Bassett has the company making $41 million in net income in 2011, on $279 million in revenue. (The company had just $47 million last year.)
- Sequenom’s share price collapsed last year after mishandling of some research data led to the ouster of the CEO and other senior executives and cast doubt on the company’s ability to develop a non-invasive diagnostic test for Down Syndrome.