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On Monday, BTIG analyst Mark Massaro adjusted the price target for Personalis (NASDAQ:PSNL) to $7.00, a decrease from the previous target of $8.00. Currently trading at $4.07, the stock has shown significant volatility, according to InvestingPro data. Despite the reduction, the firm maintained its Buy rating on the stock, joining other analysts who maintain a positive outlook with a consensus target range of $5-9. Massaro highlighted Personalis’ strong performance in 2024, particularly noting the progress in data development for its NeXT Personal MRD test and a significant 60% year-over-year growth in its pharmaceutical business.
Personalis has recently made strides by submitting its breast cancer data to Medicare for the NeXT Personal MRD test and has reaffirmed its objective to obtain Medicare coverage decisions for two of its three areas of focus: breast cancer, lung cancer, and immunotherapy monitoring. The company has also expanded its MRD clinical study pipeline to over 20 studies, demonstrating a commitment to advancing its research and development efforts.
In addition to its clinical advancements, Personalis secured $115 million in capital during 2024, which included a notable $50 million investment from pharmaceutical giant Merck (NSE:PROR) (MRK, Not Rated). This influx of funds is expected to support Personalis’ ongoing projects and potential expansion.
Massaro pointed out that Personalis shares are currently trading at 1.8 times the firm’s projected 2026 enterprise value to revenue (EV/revs), which is below the historical average multiples that typically range between approximately 3 to 7 times. The valuation presents a perspective on the company’s market performance relative to its revenue generation expectations.
In summarizing the firm’s stance, Massaro reiterated BTIG’s confidence in Personalis by maintaining the Buy rating, albeit with a slightly reduced price target of $7. This adjustment reflects the firm’s current valuation of Personalis’ prospects in light of its recent developments and funding achievements.
In other recent news, Personalis reported its fourth-quarter 2024 earnings, revealing a narrower-than-expected loss with an earnings per share (EPS) of -$0.23, beating analyst forecasts of -$0.29. Despite this, the company experienced a 15% year-over-year decline in revenue, totaling $16.8 million for the quarter. For the full year, Personalis achieved a revenue growth of 15%, reaching $84.6 million, supported by increased biopharma revenue. Needham maintained a Buy rating on Personalis but adjusted the price target from $7.25 to $7.00, reflecting the company’s revenue slowdown and reduced growth in the Oncology sector. However, Personalis saw a significant increase in test sequencing activities, completing 1,441 NeXT Dx and NeXT Personal tests in the fourth quarter, a 53% increase from the previous quarter. The company continues its collaboration with Tempus to commercialize the NeXT Personal test and is focusing on achieving key reimbursement milestones in 2025. Personalis is strategically increasing its cash burn to enhance commercial capabilities in anticipation of expected reimbursement approvals. The company ended 2024 with $185 million in cash and short-term investments, positioning it to capitalize on future market opportunities.
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