Quanterix Stock Forecast

Quanterix Corp (NASDAQ:QTRX) is a medical technology corporation that develops a range of immunoassay instruments that are used in the detection, prognoses, and treatment of various diseases.

QTRX share price rose significantly in early 2021 upon gaining approval from the U.S. Food and Drug Administration (FDA) for its COVID-19 antibody test.

Its platform may work, but is Quanterix stock a Buy?

Some investors are still licking their wounds from investing in Theranos, a $9 billion testing company that was charged in 2018 as fraud by the Securities and Exchanges Commission (SEC). But Quanterix is different.

The company’s ultra-sensitive immunoassay technology detects proteins and nucleic acids at submicroscopic levels. It can detect biomarkers for a variety of diseases, but it is the effectiveness of its SARS-CoV-2 test that has investors so hyped up.

Quanterix is now a foundational part of the fight against the coronavirus. Its machines can process these tests and determine the best way to distribute the vaccine. While it didn’t receive Operation Warp Speed grant money, its digitized biomarker analysis is the cutting edge of precision healthcare.

For investors it’s time to draw some fluids from Quanterix to see if it will provide healthy returns to investors or leave their portfolios gasping for air.

Quanterix 101

Quanterix is a Massachusetts-based biotechnology company focused on genetic research and testing. Its immunoassay instrumentation covers a wide range of applications for detecting certain biomarkers for diseases.

Unlike Theranos’ all-in-one approach, each Quanterix machine utilizes a different technology to test for specific biomarkers and provide a broad spectrum of testing capabilities. This includes Simoa bead and planar array assays for cardiology, neurology, oncology, inflammation, and infectious disease.

In addition to selling the tests and machines, it also has a CLIA-certified laboratory to process them. This makes it effectively a vertically integrated protein and nucleic acid company.

And it has FDA approval and positive clinical data to show the efficacy of its tests. They’re so good that it licenses its patented technologies to other testing labs and gained a government grant (albeit not from OWS) to continue its research and development into further tests.

The company’s equipment and testing supplies could be pivotal towards resolving some of the most common deadly health issues that plague us. It has tests for a wide range of afflictions, including traumatic brain injury (TBI), Alzheimer’s, and the SARS-CoV-2 coronavirus.

Is Quanterix Stock A Buy?

After going public for $15 per share for each of its over 4.275 million shares in December 2017, the company also offered a public offering of another 2.65 million shares in August 2020 at a price of $32.00 per share. This second offering raised $97.6 million.

Quanterix Corp has a market capitalization over $2.3 billion as of the middle of January 2021. Its share prices started the year at $44.11, which was already over 4x its March crash low price of $10.90. By the middle of January, it spike higher to trade around $75.00.

This price jump is in some part attributed to its Simoa SARS-CoV-2 N Protein Antigen test being granted an emergency use authorization (EUA) from the FDA. On top of this, it released its fiscal year 2020 preliminary reports.

In the fourth quarter, its GAAP-adjusted revenue was around $25 million, a year-over-year increase over 30 percent. The company also snagged an $18.2 million Rapid Acceleration of Diagnostics (RADx) contract with the National Institutes of Health (NIH) in the quarter.

Not only that, but it licensed its bead-based patents to Abbott Laboratories (NYSE:ABT). This gives it a profitable recurring revenue stream with low overhead and helps diversify it to mitigate risk.

And the company managed to increase its device installation to 535 during the pandemic, which is a 34 percent increase from the previous quarter.

The company expects revenue for the year to hit $85 million, which would be a 20 percent increase from the prior year even without the NIH contract.

Of course, every investment has pitfalls associated with it.

Will Quanterix Stock Fall Back To IPO Price Levels?

Quanterix has relatively low level of debt at under $8 million, but it also held relatively little cash reserves at $96.4 million before its fundraising. FDA approval isn’t cheap, and one of the company’s revenue streams is supplying the competition.

The company also risks being bundled in with so-called “pandemic stocks” when stimulus funds run dry and the economy begins recovery. That could cause its stock prices to fall back to earth due to lack of interest and market perception more than actual performance.

Still, it’s continuing to grow revenue and expand its product offerings. It’s not a pandemic stock per se in that it has a broad range of tests that have nothing to do with the coronavirus. In fact, it’s involved in one of the most cutting-edge health technology sectors.

Perhaps the biggest hurdle the company will face comes from is its rivals.

Quanterix Competitors: An Abundance Of Titans

Quanterix isn’t the only company working toward FDA approval of its tests. Abbot Laboratories (ABT) is one of them, and Merck (MRK), Millapore, MSD, Luminex, and Caprion are also in the game.

Each of these companies could attempt to reverse engineer much of the proprietary secret sauce to create their own solutions.

However, many of them will likely be stuck buying from Quanterix until then.

The company has a strong product pipeline and continues to expand its footprint into other avenues. It’s growing as both a lab and lab supplier and in doing so is essentially franchising. The licensing revenue could outperform the rest on its own.

Quanterix Stock Forecast: The Bottom Line

Quanterix is a medical technology company that creates immunoassay tests and instrumentation. These precision tests go beyond microscopic to create digital twins of our genetic material and find biomarkers.

The company skyrocketed in 2021 after the announcement of its FDA EUA, but that’s only the tip of the iceberg. Licensing deals with Abbott and a contract with the NIH ensure it will continue to generate revenues through the next year.

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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.