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On Thursday, H.C. Wainwright reaffirmed a Buy rating on Opko Health (NASDAQ:OPK) with a steady price target of $3.00, representing significant upside potential from the current stock price of $1.78. The endorsement follows Opko Health’s announcement on March 11, 2025, regarding a significant transaction with Labcorp (LH), a company not rated by the analyst. InvestingPro data shows OPK has demonstrated remarkable performance with a 93% return over the past year, though the stock remains notably volatile. Labcorp is set to acquire laboratory testing businesses specializing in oncology from BioReference Health, a fully owned subsidiary of OPKO. These assets are responsible for $85-100 million in annual revenue.
The deal includes a purchase price of $192.5 million to be paid at closing, with an additional earn-out of up to $32.5 million subject to performance criteria. Despite this sale, BioReference will retain its primary clinical testing services in New York and New Jersey, as well as its exclusive 4Kscore test, which accounted for around $300 million in revenue in 2024. According to InvestingPro analysis, Opko currently operates with a moderate debt level, with a debt-to-equity ratio of 0.37, suggesting room for strategic financial management of the incoming proceeds.
The analyst, Yi Chen, views this deal as a strategic move for BioReference to refine its operations and potentially hasten its profitability. The closure of the transaction is anticipated in the second half of 2025. It is speculated that Opko may allocate a portion of the proceeds to reduce its outstanding debt. However, Opko’s management has yet to release an updated financial outlook for 2025.
In light of these developments, H.C. Wainwright has updated their projections for Opko Health for the year 2025. The firm’s reaffirmation of the Buy rating and $3 price target reflects their continued confidence in the company’s stock performance. InvestingPro reveals additional insights through its comprehensive analysis, showing the company maintains strong liquidity with a current ratio of 3.43, though it faces near-term profitability challenges. For deeper insights, investors can access the detailed Pro Research Report, which provides extensive analysis of Opko Health’s financial health and market position.
In other recent news, Opko Health Inc. reported its fourth-quarter 2024 earnings, exceeding expectations with an earnings per share (EPS) of $0.01, against a projected loss of $0.08. Despite this positive earnings surprise, the company’s revenue fell short of forecasts, coming in at $103.1 million compared to the anticipated $156.35 million. The company achieved a net income of $14 million, a notable improvement from a net loss of $66.5 million in the same quarter of the previous year. Opko Health continues to focus on restructuring efforts, including workforce reductions at BioReference Health, which are expected to improve profitability by 2025. The company remains committed to advancing its product pipeline, with several projects in clinical and preclinical stages. Additionally, Opko Health has confirmed sufficient funding for its COVID program and highlighted progress in its HIV antibody program and Epstein-Barr virus (EBV) vaccine trials. Analysts from firms such as Jefferies have been closely monitoring these developments, reflecting ongoing interest in the company’s strategic direction and future prospects.
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