Bionano Genomics Inc. (NASDAQ: BNGO) has received a rating downgrade from BTIG from Buy to Neutral following the company's announcement of another significant workforce reduction. The decision to downgrade reflects concerns over the current difficult environment for raising capital, especially for smaller companies.
Bionano Genomics plans to reduce its workforce by 45%, a move expected to decrease its annual cash outflow by $25-30 million. This reduction includes the departure of its recently appointed CFO, Gulsen Kama. The company aims to conserve cash and shift its focus towards serving its existing user base, which includes 363 systems.
In light of these changes, Bionano also revised its revenue forecast for 2024. The company now expects revenues to be between $32 million and $36 million, which represents a 6% year-over-year decrease at the midpoint. This is a downward adjustment from the previously projected $36 million to $40 million range, which would have been flat to an 11% year-over-year increase.
The workforce reduction at Bionano Genomics is not a new development; it marks the fourth such action since May 2023. The company's strategy is to drive higher utilization per system among its current installed base, rather than expanding the number of system placements.
In other recent news, Bionano Genomics reported a 10% year-over-year decline in Q2 2024 revenue, which fell to $7.8 million due to a significant drop in flowcell sales, particularly in China.
Despite this, the company saw growth in its Optical Genome Mapping (OGM) installed base, which increased by 16 systems to a total of 363. The firm has also announced the acceptance of a Category 1 Current Procedural Terminology (CPT) code by the American Medical Association, a development that is expected to enhance the adoption of its OGM technology.
On the financial front, Bionano Genomics is implementing cost-saving measures, with plans to reduce annualized non-GAAP expenses by $65-75 million by Q1 2025. The company has also made strides in advancing its clinical studies program, including the Heme trial, and aims to improve its workflow and data analysis processing times by Q4 2024.
BTIG has reaffirmed its Buy rating on Bionano Genomics, maintaining a price target of $2.00. The firm recognizes Bionano's achievements in the second quarter and its potential to capitalize on upcoming opportunities. In addition, Bionano has entered into a deal with Revvity for newborn sequencing research software, a move that could potentially lead to future revenue and margin growth.
InvestingPro Insights
As Bionano Genomics Inc. navigates a challenging period, marked by workforce reductions and revised revenue forecasts, investors are keenly observing the company's financial health and market performance. According to InvestingPro data, Bionano Genomics currently holds a market capitalization of $38.27 million. Despite a modest revenue growth of 16.08% over the last twelve months as of Q2 2024, the company faces significant challenges, with an operating income margin of -286.05% indicating substantial operating losses.
An InvestingPro Tip worth noting is that analysts have recently revised their earnings upwards for the upcoming period, suggesting a potential shift in the company's trajectory. However, it is essential to remain cautious as Bionano Genomics has been quickly burning through cash, and analysts do not anticipate the company will be profitable this year. The stock price has also been quite volatile, with a significant 86.87% decline over the past year, although there has been a strong return of 13.12% in the last month.
For investors considering Bionano Genomics as part of their portfolio, it's important to be aware of these dynamics. For a more comprehensive analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/BNGO, providing deeper insights into the company's financials and market performance.
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