On Thursday, Baird adjusted its price target for bluebird bio (NASDAQ:BLUE), a biotechnology company, to $6.00, down from the previous $7.00. Despite the reduction, the firm retains an Outperform rating on the stock. The revision followed bluebird bio's announcement of its second-quarter financial results for 2024 and an update on cell collections from its commercial cell therapies.
The company disclosed that the number of patients who have undergone cell collections for treatment with its therapy, Lyfgenia, may have been below investor expectations. However, Baird remains optimistic about the company's future. The firm highlighted that early indicators, such as the 40 patients with cell collections scheduled through the end of the year, suggest a stronger demand for bluebird's therapies than what the current stock valuation implies.
Baird's stance is that the market has not fully recognized the potential of bluebird bio's offerings. The firm's maintained Outperform rating indicates a belief that the company's stock will perform better than the average total return of stocks analyzed by Baird over the next 12 months.
The financial results and updates provided by bluebird bio are critical for investors looking to gauge the company's progress and future prospects. The firm's analysis suggests that despite the initial slow uptake, there is a robust demand for the company's cell therapies, which could lead to a more favorable performance in the market.
In other recent news, bluebird bio has reported robust results for Q2 2024, with a significant increase in revenue from $16.1 million. This revenue reflects treatments for eight Zynteglo and one Skysona patient during the quarter. Despite an anticipated dip in third-quarter revenue due to manufacturing cycle times, the biotechnology firm expects a strong rebound in the fourth quarter.
In a recent development, JPMorgan has downgraded bluebird bio from Overweight to Neutral due to the company's second-quarter results falling short of expectations. The downgrade also reflects concerns over the revised terms of bluebird bio's loan agreement with Hercules Capital (NYSE:HTGC), which require additional capital raising.
The company has also revised its full-year 2024 guidance, now anticipating approximately 85 patient starts, primarily due to advanced scheduling by patients extending into fiscal year 2025. Despite these adjustments, bluebird bio maintains a positive outlook, with over 70 qualified treatment centers operational and 27 patient starts completed this year. The company's cash on hand is reported at $193.4 million, projected to last until Q2 2025.
InvestingPro Insights
As bluebird bio navigates its financials and market expectations, several metrics from InvestingPro provide a deeper understanding of the company's current position. With a market capitalization of $157.07 million, bluebird bio is a smaller player in the biotech industry. The company has experienced a substantial revenue growth rate of 322.68% over the last twelve months as of Q3 2023, indicating a strong increase in sales. However, this growth comes with challenges, as reflected by the company's gross profit margin, which stands at an alarming -837.57%, underscoring the cost-related pressures bluebird bio faces.
InvestingPro Tips highlight critical areas of concern and potential for investors. Analysts have noted that while they expect sales to grow in the current year, bluebird bio is quickly burning through cash and has not been profitable over the last twelve months. The company's stock price has also suffered, with a one-year total return of -77.49% as of the same period, trading near its 52-week low. This could be a reflection of the market's reaction to the company's financial health and its ability to sustain operations without consistent profitability.
For those considering an investment in bluebird bio, these insights suggest caution. The company's significant revenue growth shows promise, but the negative gross profit margins and the rapid cash burn rate raise questions about long-term sustainability. Interested investors can find additional InvestingPro Tips to aid in their decision-making process, with a total of 11 tips currently available at https://www.investing.com/pro/BLUE.
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