BTIG’s Karen Koski believes the proprietary technology platform of Fulgent Genetics Inc (NASDAQ: FLGT) “drives multiple sustainable competitive advantages, including a broad and flexible test menu and an attractive cost structure.”
Koski initiated coverage of the company with a Buy rating and price target of $15.
Significant Growth Expected
The analyst expects the genetic testing market, specifically multi-gene panels, to witness meaningful growth over the next decade, with continued decline in NGS costs, along with an expansion in the breadth of content, increase in patient and physician awareness, the availability of data on additional actionable clinical mutations and more widespread reimbursement coverage.
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“Since launching its first commercial genetic tests focused on rare pediatric diseases in 2013, Fulgent has expanded its offering to include more than 18,000 single-gene tests and 200+ multi-gene, disease-specific panels that collectively test for over 7,500 genetic conditions,” Koski noted.
The analyst expects test volume and revenue of 13,000 and $18.8 million, respectively, for 2016, representing material growth over the 2014 and 2015 levels.
Koski also believes Fulgent Genetics’ ability to achieve profitability at the current revenue levels has been impressive, while also being a “rare feat” in the diagnostics category.
“And we look favorably upon FLGT’s multi-faceted strategy for future growth, which includes: vertical and lateral customer growth via sales and marketing expansion, broadening its product offering to address new markets, international expansion, developing payor relationships,” the analyst added.
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Latest Ratings for FLGT
|Oct 2016||BTIG Research||Initiates Coverage On||Buy|
|Oct 2016||Credit Suisse||Initiates Coverage On||Outperform|
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