- Since I last covered the stock, NeoGenomics - a cancer testing provider - has seen shares grow by 87%, to $50 at the time of writing.
- The company's core operations suffered in 2020 owing to the pandemic, but revenue losses were compensated by a side-line in PCR COVID testing.
- The company showed 9% annual revenue growth, but in order to justify its current $5.8bn market cap, an acquisition-led strategy may be necessary, driven by ~$500m of fresh funding.
- Neo's long-term CEO also is retiring and a new CEO is in place - possibly to prioritize the newer Pharma Services business over its main revenue driver - Clinical Services.
- I think there could be some turbulence in 2021 for Neo, and staying neutral on the share price for now. Longer term, if management executes on an ambitious organic/inorganic growth plan, I think >$80 is achievable.
For further details see:
NeoGenomics: Well-Funded Cancer Diagnostics Play Needs To Execute On Ambitious Growth Plan