On Monday, H.C. Wainwright adjusted the stock price target for BioLife Solutions (NASDAQ:BLFS), decreasing it to $27 from the previous $29, while keeping a Buy rating on the stock.
This change comes after BioLife Solutions completed the sale of its last wholly owned freezer subsidiary, Arctic Solutions, for $6.1 million in cash. This transaction, which took place last week, marked the end of the company's divestiture of its freezer and related businesses that began in April 2024.
Moreover, BioLife Solutions also sold its wholly owned biostorage subsidiary, SciSafe Holdings, for $73 million in cash last week. SciSafe was reported to have generated roughly $10.4 million in revenue during the first half of 2024. These sales are part of BioLife's strategic shift to focus on its proprietary cell processing products, which offer higher margins and recurring revenue, moving away from its capital equipment freezer and storage businesses.
The divestitures have led to a revision of projected revenues for the next 12 months, prompting the analyst to set a new price target. Despite the lowered revenue projections and price target adjustment, H.C. Wainwright reaffirms its confidence in the stock with a continued Buy rating. The firm's revised 12-month price objective now stands at $27 per share, reflecting the recent strategic changes and their impact on BioLife's financial outlook.
In other recent news, BioLife Solutions has reported significant developments. The company's third quarter of 2024 saw a notable 30% increase in revenue year-over-year, reaching $30.6 million. Its cell processing platform revenue also saw a substantial rise, growing by 43% to reach $19 million. The adjusted gross margin improved to 54%, with the adjusted EBITDA margin rising to 20%.
BioLife Solutions recently completed its strategic divestiture, selling its freezer subsidiary, Custom Biogenic Systems (CBS), for $6.1 million in cash. This move marks the final step in BioLife's shift away from capital equipment businesses, allowing the company to focus on its proprietary cell processing products. Earlier, the company also sold its SciSafe division for $73 million, further strengthening its financial position.
Despite these divestitures, BioLife Solutions raised its cell processing revenue guidance for 2024 to be between $72 million and $73 million. However, the company revised its total revenue guidance for the same year to between $98 million and $100 million due to the sale of SciSafe.
Analyst firms have shown confidence in BioLife Solutions' strategic decisions. Stephens maintained its Overweight rating and a steady stock price target of $30.00, while TD Cowen increased the company's price target from $28.00 to $31.00, maintaining a Buy rating on the stock. These recent developments reflect the company's successful transition towards a business model centered on consumable, recurring revenue streams with higher margin potential.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on BioLife Solutions' (NASDAQ:BLFS) financial position and market performance following its strategic divestitures. The company's market capitalization stands at $975.06 million, reflecting its current market valuation after the recent sales of its freezer and biostorage subsidiaries.
Despite the recent strategic shifts, BioLife Solutions has demonstrated strong revenue growth, with a 29.69% increase in quarterly revenue as of Q3 2024. This aligns with the company's focus on its higher-margin cell processing products. However, it's worth noting that the company is not currently profitable, with an adjusted operating income of -$37.84 million over the last twelve months.
InvestingPro Tips highlight that BioLife Solutions operates with a moderate level of debt and its liquid assets exceed short-term obligations, which could provide financial flexibility as it transitions its business model. Additionally, the stock has shown a high return over the last year, with a 64.6% price total return, despite recent volatility.
Investors should be aware that analysts anticipate a sales decline in the current year, likely due to the divestiture of certain business units. This expectation is reflected in H.C. Wainwright's revised price target and revenue projections.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for BioLife Solutions, providing deeper insights into the company's financial health and market position.
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