Bionano Genomics, Inc. (BNGO) provides genome analysis software solutions. It offers Saphyr, Saphyr instruments, Saphyr Chip, Bionano Prep Kits, and DNA labeling kits.

Erik Holmlin, Ph.D., President, and CEO of BNGO, believes that the company’s planned advancements have laid the foundation for revenue growth and further penetration of its target markets, including cytogenomics, discovery research, and cell bioprocessing.

BNGO has gained 12.3% over the past month to close the last trading session at $2.29. Moreover, Wall Street analysts expect the stock to hit $6.00 in the near term indicating a potential upside of 162%.

However, it has lost 23.4% year-to-date and 61.4% over the past year. On top of it, the stock is trading near its 52-week low of $1.16, which it hit on May 12, 2022.

Also, the stock's bottom-line outlook doesn't seem bright. Analysts expect BNGO's EPS to decline 65.4% year-over-year to negative $0.43 in 2022. Moreover, its EPS is expected to remain negative in 2023.

Here is what could shape BNGO's performance in the near term:

Rising Expenses and Declining Bottom Line

For the third quarter that ended September 30, 2022, BNGO's total revenue came in at $7.22 million, up 55.1% year-over-year.

However, its loss from operations came in at $32.15 million, up 55.5% year-over-year. Moreover, its net loss came in at $31.81 million, up 53.3% year-over-year. Also, its non-GAAP operating expenses came in at $26.39 million, up 41% year-over-year.

Stretched Valuation

BNGO's forward EV/Sales of 18.93x is 403.3% higher than the industry average of 3.76x. Its forward Price/Sales of 25.23x is 495.1% higher than the industry average of 4.24x. In addition, its trailing-12-month Price/Book of 2.41x is 26.6% higher than the industry average of 1.91x.

Negative Profitability

BNGO's trailing-12-month gross profit margin of 16.91% is 68.9% lower than the industry average of 54.31%. Its trailing-12-month levered FCF margin of negative 217.16% is lower than the negative industry average of 2.44%.

Furthermore, its trailing-12-month ROTC and ROTA of negative 23.96% and 36.10% compared with the industry averages of negative 21.75% and 30.24%, respectively.

POWR Ratings Reflect Bleak Prospects

BNGO has an overall rating of F, equating to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. BNGO has an F grade for Quality, consistent with its lower-than-industry profit margins.

It has a D grade for Value, consistent with its higher-than-industry valuation multiples.

The stock has an F grade for Stability, in sync with its beta of 2.26.

In the 386-stock Biotech industry, BNGO is ranked #383. The industry is rated F.

Click here for the additional POWR Ratings for BNGO (Growth, Momentum, and Sentiment).

View all the top stocks in the Biotech industry here.

Bottom Line

BNGO's bottom line in its latest reported quarter has dropped drastically year-over-year. Moreover, the stock's bleak profitability scenario is concerning. With the stock trading near its 52-week low, it could be best avoided now.

How Does Bionano Genomics, Inc. (BNGO) Stack Up Against Its Peers?

While BNGO has an overall POWR Rating of F, one might consider looking at its industry peers, Vertex Pharmaceuticals Incorporated (VRTX), United Therapeutics Corporation (UTHR), and Gilead Sciences, Inc. (GILD), which have an overall A (Strong Buy) rating, and Amgen Inc. (AMGN), which has an overall B (Buy) rating.

BNGO shares were trading at $2.26 per share on Monday afternoon, down $0.03 (-1.31%). Year-to-date, BNGO has declined -24.41%, versus a -19.18% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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