CTAs are almost max long in equities, have very limited room to buy: UBS
On Wednesday, William Blair made a significant change to Biodesix’s (NASDAQ:BDSX) stock rating, downgrading it from Outperform to Market Perform. The decision followed Biodesix’s recent first-quarter update, which included a downward revision of its full-year revenue guidance by 12%, translating to approximately $11 million less than initially projected. The market has responded sharply, with the stock down 75% over the past year and currently trading at $0.36. InvestingPro analysis shows the stock trading below its Fair Value, with 10+ additional real-time insights available to subscribers.
The lowered revenue forecast is attributed to a slower-than-anticipated pace in salesforce representative hiring and a slightly higher rate of rep attrition than expected. William Blair highlighted that these factors have placed Biodesix’s stock into a "show me" status, indicating that investors may now adopt a wait-and-see approach towards the company’s performance. Despite these challenges, InvestingPro data reveals the company maintains strong revenue growth of 45.3% and a healthy current ratio of 2.76, indicating solid short-term liquidity.
Biodesix has introduced a new territory-based sales structure, which was first unveiled in the previous quarter and reiterated during the latest earnings call. William Blair suggests that it may not be until the latter part of 2025 or early 2026 when investors could gain more confidence in the sales team’s productivity metrics. These metrics are expected to align with or potentially exceed the initial assumptions for the expanded team, which is projected to grow from around 65 representatives today to approximately 95 by the end of 2025.
Another key milestone for Biodesix is the target of reaching Adjusted EBITDA (AEBITDA) positivity by the fourth quarter of 2025. Achieving this financial goal is seen as a crucial step in reducing the economic risks associated with the company. William Blair posits that meeting these objectives could lead to a significant increase in Biodesix’s share price. With a current market capitalization of $52.42 million, detailed financial analysis and comprehensive valuation metrics are available in the InvestingPro Research Report, part of the platform’s coverage of 1,400+ US stocks.
Despite the lowered revenue guidance and the subsequent rating downgrade, William Blair believes that Biodesix’s stock is currently trading at what they consider to be a very discounted valuation. However, until the company demonstrates progress towards its sales and financial targets, the firm anticipates that the stock may encounter limited growth potential.
In other recent news, Biodesix reported a 21% year-over-year increase in revenue for the first quarter of 2025, reaching $18 million. Despite this growth, the company revised its revenue guidance for the year to $80-85 million, down from previous estimates. The net loss improved by 18% year-over-year, totaling $11.1 million, and the company aims for adjusted EBITDA positivity by the fourth quarter of 2025. Canaccord Genuity maintained a Buy rating on Biodesix shares but lowered the price target from $2.50 to $1.50 following the company’s financial results. This adjustment was influenced by a reduction in Biodesix’s sales force and slower-than-expected recruitment of new sales representatives. The company is focused on expanding its primary care sales team, with plans to bolster the team to 95 members by the end of the year. Biodesix remains optimistic about its financial trajectory, anticipating a significant increase in revenue during the second half of 2025. The company is also exploring the commercialization of its MRD test in 2026-2027, with plans to expand its diagnostic offerings.
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