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On Friday, TD Cowen revised its stance on Cytek Biosciences Inc (NASDAQ:CTKB), downgrading the stock from Buy to Hold and reducing the price target to $4 from the previous $7. The adjustment reflects concerns over the company’s recent performance and future revenue projections. Currently trading at $3.79, InvestingPro analysis suggests the stock is undervalued, despite a significant 46% decline over the past six months.
Cytek Biosciences, known for its role in the flow cytometry sector, encountered several challenges in the first quarter, missing both revenue and earnings expectations. While the company maintains a strong balance sheet with a healthy current ratio of 5.62 and more cash than debt, its full-year 2025 revenue guidance was revised to range between a 2% decline and a 5% year-over-year increase. InvestingPro data shows analysts expect the company to return to profitability this year, with positive earnings forecasted.
The downgrade by TD Cowen underscores the impact of various factors affecting Cytek Biosciences. The company’s exposure to the National Institutes of Health (NIH) funding, which accounts for 5% of its business, along with a 10% exposure to the Chinese market, are among the notable concerns. Additionally, increased export controls and broader worries about biopharma funding are seen as significant headwinds.
In a statement, TD Cowen analysts expressed caution regarding Cytek Biosciences’ near-term prospects, suggesting investors remain on the sidelines until there is more clarity on the company’s path to sustained growth. The revised price target of $4 represents a $3 decrease from the previous target, indicating a more conservative outlook on the stock’s potential.
The reduction in Cytek Biosciences’ price target and stock rating highlights the challenges the company faces amidst a complex operating environment. Investors are advised to monitor the situation as it evolves. For deeper insights, InvestingPro subscribers can access 8 additional ProTips and a comprehensive Pro Research Report, offering valuable analysis of Cytek’s financial health, which currently maintains a "Good" overall score.
In other recent news, Cytek Biosciences announced its first-quarter earnings for 2025, reporting a net loss and revenue figures that did not meet analysts’ expectations. The company posted an earnings per share of -$0.09, significantly missing the forecasted -$0.02, while revenue reached $41.5 million, falling short of the anticipated $43.82 million. Despite the earnings miss, Cytek Biosciences maintained its full-year revenue guidance of $196-210 million, anticipating stronger growth in the latter half of the year. Service revenue saw a positive increase of 24% year-over-year, although product revenue declined by 18%. The company also highlighted its strategies to mitigate tariff impacts through regional manufacturing and sourcing adjustments. Analysts from Morgan Stanley (NYSE:MS) and other firms raised concerns about the impact of tariffs and funding uncertainties in academic markets. Cytek Biosciences assured investors that these challenges have been factored into their revised guidance and emphasized their strong market position outside the United States. The company continues to invest in its product pipeline, with a focus on expanding its global manufacturing footprint and enhancing its service and reagent offerings.
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