On Wednesday, CryoPort Inc. (NASDAQ:CYRX) stock received an upgraded rating from B.Riley, moving from Neutral to Buy, despite a lowered price target, now set at $15.00, down from the previous $19.00.
The logistics firm, specializing in temperature-controlled supply chain solutions for the life sciences industry, reported first-quarter results that fell short of both the firm's and consensus estimates.
The company disclosed quarterly figures on Sunday, May 7, 2024, with a reported revenue of $54.6 million, an adjusted EPS (earnings per share) of $(0.43), and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $(7.7 million).
These results did not meet the expected revenue of $58.8 million and adjusted EPS of $(0.32) to $(0.35), with an adjusted EBITDA forecast between $(4.0 million) and $(4.3 million).
CryoPort's revenue showed a 5% decrease quarter-over-quarter and a 13% drop year-over-year. The decline was primarily attributed to reduced demand for MVE products and a deceleration in service growth.
The breakdown of revenues included $36.8 million from service revenue, which saw a slight 1% dip quarter-over-quarter but a 3% increase year-over-year, and $17.8 million from product revenue, which experienced a more significant 12% fall quarter-over-quarter and a 34% drop year-over-year.
Despite the lower-than-expected performance, CryoPort's management remains optimistic about the company's revenue trajectory for the remainder of the year, maintaining their full-year revenue guidance of between $242 million and $252 million.
This outlook is supported by an observed increase in commercial cell therapy sales in the second quarter, particularly for therapies such as Carvykti and Breyanzi. However, the firm expressed a cautious stance in the short term due to a slowdown in research and development investment impacting both clinical trials and capital equipment.
In other recent news, Cryoport Inc . faced a challenging first quarter, particularly in its life science products segment, due to a decline in demand, notably from China. Despite this, the company remains confident in achieving its full-year revenue guidance of $242 million to $252 million.
CEO Jerrell Shelton highlighted the company's positive momentum in its cell and gene therapy client sector and the growth of BioStorage/BioServices revenue, predicting an increase in revenue for the rest of the year.
Cryoport's initiatives to drive positive adjusted EBITDA and cash flow, such as reducing its workforce and leveraging shared services, are underway. The company ended the quarter with a robust cash balance of $448.5 million.
Plans are in place to begin manufacturing freezers in China by mid-next year to cater to the local market, with the aim of achieving a gross margin of 55-60% and an adjusted EBITDA margin of 30%.
Despite the bearish outlook due to decreased demand for MVE Biological Solutions' Cryogenic Systems, particularly in China, there are bullish highlights. BioServices saw a 9% year-over-year growth in the first quarter, and the onboarding of 27 new clients in new facilities indicates potential future revenue. These are some of the recent developments in Cryoport's operations.
InvestingPro Insights
Following the recent earnings report and subsequent rating upgrade by B.Riley, CryoPort Inc. (NASDAQ:CYRX) presents a mixed financial landscape according to the latest data from InvestingPro. With a market capitalization of $445.78 million, CryoPort's stock price volatility remains a factor for investors to consider. Despite the challenges reflected in the first-quarter results, one of the InvestingPro Tips indicates that the company's liquid assets surpass its short-term obligations, suggesting a level of financial stability in the face of current headwinds.
InvestingPro Data also reveals a Price to Book ratio of 1.0 as of the last twelve months leading up to Q1 2024, which may appeal to value-oriented investors. However, the company's revenue growth has contracted by 9.19% over the same period, aligning with the downturn reported in the first-quarter earnings. The gross profit margin stands at a healthy 41.79%, yet the company's operating income margin is negative at -31.05%, reflecting the profitability challenges highlighted by the analysts.
For those interested in a deeper dive, there are additional InvestingPro Tips available which can provide further guidance on CryoPort's financial health and future prospects. To explore these insights and make informed investment decisions, readers can take advantage of the special offer using the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
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