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Monday, Benchmark analysts maintained their Speculative Buy rating and $4.50 price target on Harvard Bioscience Inc. (NASDAQ:HBIO), representing significant upside from the current price of $0.42. According to InvestingPro analysis, the stock appears undervalued after falling over 90% in the past year, with multiple indicators suggesting a potential turnaround opportunity.
On Friday, the FDA announced initiatives to reduce reliance on animal testing for drug development, favoring New Approach Methodologies (NAMs). These include laboratory-based toxicology testing using cell lines and organoids, as well as AI-driven computational models. This shift is seen as a positive development for Harvard Bioscience’s Multi-Electrode Array (MEA) electrophysiology system, designed for organoid research, which is anticipated to be a key growth contributor for the company in 2025. With current annual revenue of $94.14 million and a market capitalization of $18.47 million, the company maintains a strong gross profit margin of 58%.
In a separate statement, Harvard Bioscience revealed that CFO Jennifer Cote will depart from her role after the submission of the 10-Q report. The company clarified that her exit is not due to any internal disputes or issues related to financial operations. Mark Frost, who has previously worked with CEO Jim Green at Analogic, will assume the CFO position following Cote’s departure.
Benchmark analysts have not adjusted their estimates or rating for Harvard Bioscience in light of these announcements. The company’s stock price target remains at $4.50, with the expectation that the MEA system will drive growth in the coming years, particularly as industry practices align with the FDA’s recent pronouncement.
In other recent news, Harvard Bioscience reported its fourth-quarter 2024 earnings, showing an earnings per share (EPS) of $0.06, which surpassed the forecasted $0.05. The company also reported revenue of $24.6 million, exceeding expectations of $24.15 million. Despite these positive results, the company experienced a 16% decline in full-year revenue compared to 2023, indicating challenges in the market. In another development, KeyBanc Capital Markets downgraded Harvard Bioscience from an "Overweight" to a "Sector Weight" rating, citing concerns about the company’s financial stability and market exposure risks. The company is facing a refinancing deadline of June 30, 2025, for approximately $37 million in debt, adding to its financial uncertainty. Additionally, Harvard Bioscience announced the upcoming resignation of its CFO, Jennifer Cote, with Mark Frost stepping in as the interim CFO. These changes are part of the company’s efforts to navigate the competitive life science industry amidst current market challenges.
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