Morgan Stanley has adjusted its stance on Akoya Biosciences Inc (NASDAQ: AKYA), downgrading the stock from Overweight to Equalweight and lowering the price target to $3.00 from $4.00.
The firm cited a less-than-expected rebound in placements due to weak capital spending. Despite an in-line quarter, the company's guidance was revised downward.
The financial institution noted that Akoya Biosciences' focus on cash management was positive, with the Chief Financial Officer's break-even point expected to be reached by year-end.
However, the firm acknowledged that investors might need to be patient to see the company's value increase. This is because of the heavy mix of instruments in Akoya's offerings and limited visibility on when a macroeconomic recovery might occur.
Morgan Stanley's revised price target of $3.00 reflects a more conservative outlook on Akoya Biosciences' near-term financial performance. The downgraded rating suggests that the stock's previous growth expectations have been tempered in light of the company's recent performance and market conditions.
The report indicates that while Akoya Biosciences is managing its finances effectively, the anticipated upside in its stock value may take longer to realize. The analyst pointed out that the company's valuation is not demanding, which could be a positive sign for investors willing to wait for a market turnaround.
Akoya reported a substantial revenue increase of 26% to $23.2 million in its second-quarter earnings call for 2024. This growth was driven by an increase in reagent volumes and instrument placements. The company now boasts an industry-leading install base of 1,264 instruments and has set its sights on achieving operating cash flow break-even by the end of the year.
In addition to its revenue growth, Akoya Biosciences also reported improvements in gross margin and a decrease in operating expenses. The company's revenue outlook for the full year of 2024 is projected between $96 million and $104 million.
InvestingPro Insights
Recent market data from InvestingPro provides a clearer picture of Akoya Biosciences Inc's (NASDAQ:AKYA) financial health and stock performance. With a market capitalization of $98.77 million and a P/E ratio that remains negative at -1.57, indicating that the company is not currently profitable, Akoya's financial challenges are evident. The gross profit margin stands at a strong 57.57%, showing that while the company is making a significant profit on the products it sells, operational efficiencies need improvement, as reflected by the negative operating income margin of -59.7%.
InvestingPro Tips highlight the company's cash burn concerns and the recent stock price hit, with Akoya trading near its 52-week low. Despite the company's liquid assets exceeding short-term obligations, analysts do not anticipate profitability this year, which aligns with Morgan Stanley's cautious stance. It's also notable that the stock price has fallen significantly over the last three months, with a 47.82% drop, underscoring the need for investor patience as the company works towards its financial goals.
For those considering a long-term position, it's important to consider these metrics and the additional 8 InvestingPro Tips available on the platform, which provide deeper insights into Akoya Biosciences' performance and prospects. The InvestingPro Fair Value estimate stands at $2.59, which is below the current trading price, suggesting that investors should keep an eye on potential undervaluations.
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