CryoPort Inc (NASDAQ:CYRX) is a cold chain logistics company that specializes in cryogenic shipping and storage. High-value samples, like cell and gene therapies, require specific handling temperatures, and the company’s pipeline is an end-to-end solution to make it a seamless process.
Its services are used in biopharmaceutical, animal health, and in vitro fertility applications, so is CryoPort stock a Buy?
An increase in vaccinations and testing means more gene-related transportation is also needed, and the company’s market capitalization skyrocketed in 2021.
As its valuation increased, CryoPort offered another 4,356,059 shares of common stock at $66.00 per share on January 25, 2021. This somewhat leveled the market and ended its rally, leaving investors wondering what the long-term play is.
We freeze CryoPort and examine its assets to determine if it has investor longevity or if it’ll get the cold shoulder by summer.
CryoPort Cold Chain Logistics: Right Place & Time
CryoPort is a cold chain logistics company that services the life sciences industry with temperature-sensitive storage and transportation solutions. On that end, it’s somewhat of a logistics company play like Amazon, except with the added difficulty of precise mobile cold storage.
The company sends a pre-charged liquid nitrogen vapor dry package and prepares all the necessary paperwork to ship biological specimens across state and country lines. It then schedules a courier and lets customers track the full delivery, much like USPS or Fedex (FDX).
Of course, these are the types of shipments that often can’t be sent via those traditional methods. The shipping pods themselves are certified non-hazardous by the IATA, so it has less restriction than dry ice. Many countries won’t even allow dry ice, which makes this a rare solution for specific use cases.
The company signed a partnership deal with the Colorado Center for Reproductive Medicine in 2020. It also acquired several companies, MVE Biological Solutions and CRYOPDP, by the end of the year. This expands its temperature-controlled shipping capabilities.
With the pandemic still raging, some investors wonder if the stock is worth buying at current prices.
Is CryoPort Stock A Buy?
CryoPort kicked off 2021 with a market capitalization of around $2 billion, which quickly raised to nearly $3 billion before settling around $2.8 billion after its stock offering. The company’s share prices fell to a 52-week low of $13.01 before surging higher by hundreds of percent.
By the end of January, shares were trading over $70.00, signaling a market rally around the stock as COVID-19 vaccines rolled out to the global public.
The company raised an estimated $287.5 million from its newly issued shares, and analysts believe it’s close to its breakeven point. As freight and logistics companies go, it’s in the right place at the right time. The public offering earned it $87.5 million more than expected a week prior.
Its third quarter 2020 revenue of $11.2 million is 17 percent higher than the $9.6 million earned in the same period of 2019. Both Novartis and Gilead renewed agreements for several of their treatments. Bristol Myers Squibb (BMY) also sourced it.
Growth in clinical trials boosted the company’s profitability, and the reopening of fertility clinics should pump more liquidity into it. And the company is supporting 26 COVID-19 clinical trials.
KeyBanc upgraded its price target from $54.00 to $75.00 on January 19, and it rose to nearly $85.00 before it finally lost steam in January 2021.
Now analysts wonder how much more growth is left in this stock.
Will CryoPort Share Price Drop?
Although it’s on an overall growth pace, it’s tied to the pandemic. And sooner or later, expectations are that vaccines will prove effective in returning society to more normalcy. “Pandemic stocks” are expected to shrink while recovery stocks prevail at that time.
CryoPort offers a great service, but it needs to continue growing its animal health, biopharma, and reproductive health lines. Its market is small and may not be as scalable as something like cloud infrastructure or cybersecurity.
And the company’s recent acquisitions saddled its balance sheet with some debt. It has $202.9 million in cash and cash equivalents on hand in October 2020, more than double its cash at the end of 2019.
The convertible debt offering in September 2020 gave it $111.3 million in proceeds to make that happen. Without that, it actually would have gone down.
On top of tightening market conditions, the company also has competition.
Can CryoPort Competitors Win?
CryoPort has rivals in temperature-controlled transportation. Companies like MegaCorp Logistics and Coyote Logistics have similar shipping capabilities. Its patented design allows CryoPort somewhat of a competitive advantage, especially when it comes to smaller shipments.
It’s unclear which of these approaches will ultimately prevail. Many healthcare transport jobs still need to be done by local courier services. You can’t ship a kidney for transplant through Fedex, for example.
This type of transport is also essential in some food shipments, especially meat and seafood. As the market shrinks, each company needs to find ways to reduce operational expenses while optimizing their supply chains to provide for the best possible service.
Of course, Ted Williams, Dora Kent, and other cryogenically frozen people could make a comeback one day that requires the company’s services.
Is CryoPort Stock A Buy? The Bottom Line
CryoPort is a cryogenic logistics company that provides full end-to-end supply chain solutions for storage, transport and tracking. It serves the biopharmaceutical, animal, and reproductive health markets, and that gave it a big boost from the pandemic.
With that comes a double-edged sword though. Pandemic stocks are expected to eventually cool on the market as recovery stocks…well…recover. And that could weigh down on this company’s current successes.
But it’s investing its profits into buying more companies, and the horizontal and vertical integration could put the competition and critics on ice.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.