Microvast Holdings announces departure of chief financial officer
On Friday, Goldman Sachs analyst Matthew Sykes downgraded Cytek Biosciences Inc (NASDAQ:CTKB) stock rating from Buy to Sell and reduced the price target to $4.50 from the previous $7.00. The downgrade reflects concerns over the company’s market position and sales outlook. Sykes pointed out that the consensus expectations for a top-line recovery in 2025, which predict approximately 11% growth, appear overly optimistic given the competitive pressures facing Cytek Biosciences. According to InvestingPro data, the company’s revenue growth was 9.88% in the last twelve months, with a current market capitalization of $729 million.
The analyst highlighted that competitors with larger research and development budgets and commercial reach are introducing new products, which could hinder Cytek’s ability to continue gaining market share. This trend is evidenced by the impact of Becton Dickinson (NYSE:BDX)’s S8 Cell Sorter launch on Cytek’s sales, as the company reported a preliminary revenue miss of approximately $6 million versus the midpoint of its FY24 guidance, which was between $203 million and $210 million. Despite these challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 6.21 and holds more cash than debt on its balance sheet. Get access to 7 more exclusive InvestingPro Tips and detailed financial metrics with an InvestingPro subscription.
Sykes also expressed concerns about Cytek’s exposure to the academic and government end markets, which make up 45% of the company’s total revenue. Geopolitical issues and uncertainties regarding National Institutes of Health (NIH) funding pose risks, especially since Cytek has significant direct revenue exposure to NIH funding, accounting for 10% of its total company revenue. The analyst mentioned that the U.S. Department of Commerce’s new export controls on biotech equipment to China could further challenge Cytek’s growth, despite strong year-to-date performance in the Asia-Pacific region, where they experienced over 20% growth from 1Q24 to 3Q24.
The potential for budgetary changes at the NIH under the new U.S. administration was noted as another concern. If the NIH budget is significantly reduced or funds are reallocated, Cytek’s U.S. academic and government customers may need to reassess their spending priorities, which could impact the company’s instrument sales. The downgrade by Goldman Sachs suggests a cautious outlook for Cytek Biosciences’ stock in the face of these industry and policy challenges. With a gross profit margin of 54.92% and analysts expecting profitability this year, investors can access comprehensive analysis and Fair Value estimates through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Cytek Biosciences’ Q4 sales fell short of estimates, with preliminary revenue estimated between $57 million and $58 million, a year-over-year decrease of 2% to no change, missing the Bloomberg Consensus estimate of $61.5 million. The company attributes this to the strengthening of the US dollar, which negatively impacted revenue by about $1.5 million. Despite this, Cytek Biosciences anticipates its 2024 revenue to fall within the range of $200 million to $201 million, reflecting a 4% growth compared to 2023.
In other developments, Cytek Biosciences announced a new stock repurchase initiative, committing to buy back up to $50 million worth of its common stock. This follows the expiration of the existing repurchase program of the same amount. Meanwhile, Piper Sandler adjusted the stock price target for Cytek Biosciences, decreasing it to $8.25 from the previous $8.50, while maintaining an Overweight rating on the stock.
In the third quarter of 2024, Cytek Biosciences reported a 7% year-over-year increase in total revenue, reaching $51.5 million. This growth was largely driven by strong performance in the EMEA and APAC regions, and a 14% quarterly increase in product revenue due to a recovery in the US biopharma sector. The company also reported a significant improvement in net income, amounting to $0.9 million, a positive shift from a net loss of $6.5 million in the same quarter of the previous year.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.