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Investing.com - Piper Sandler has identified potential buying opportunities in dislocated Life Science Tools & Labs stocks, particularly highlighting Neogenomics (NASDAQ:NEO), Myriad Genetics (NASDAQ:MYGN), and Cytek Biosciences (NASDAQ:CTKB) as compelling post-earnings investments despite current market challenges.
The investment firm acknowledges the current "punitive market" environment and doesn’t expect significant earnings beats or 2025 revenue guidance increases from these companies. However, Piper Sandler believes these stocks, trading near all-time low multiples, could reset expectations to achievable levels, creating opportunities for small-cap value investors.
For Neogenomics, trading at 1.3x 2026E revenues versus its five-year average of 4.8x, Piper Sandler suggests the stock could be "significantly undervalued" despite concerns about aggressive guidance and management transitions. The firm wants to see NEO beat Q2 numbers while lowering aggressive second-half guidance to restore investor confidence.
Regarding Myriad Genetics, which has dropped over 84% from its 52-week high following reimbursement losses and implementation issues, Piper Sandler emphasizes the importance of demonstrating controlled cash burn following Q1’s $17M burn and presenting a coherent strategic vision under new CEO Sam Raha. InvestingPro data reveals the company maintains a healthy current ratio of 1.9 and generates substantial revenue of $831.3M in the last twelve months, with a robust gross profit margin of 70%. Two key InvestingPro Tips highlight management’s aggressive share buybacks despite current profitability challenges, with additional insights available on the platform.
For Cytek Biosciences, Piper Sandler highlights potential growth opportunities in biopharma customers and eventual clinical applications, noting the company’s financial discipline could allow it to "control its own destiny" regarding financing or acquisition possibilities, with many large companies operating in the flow cytometry space representing potential buyers. For deeper insights into these companies’ valuations and comprehensive financial analysis, investors can access detailed metrics and expert analysis through InvestingPro’s extensive research tools and ad-free platform.
In other recent news, Myriad Genetics reported a revenue of $196 million for the first quarter of 2025, which fell short of the $200.9 million forecast. The company’s earnings per share (EPS) also did not meet expectations, partly due to a $10 million negative impact from a policy change by UnitedHealth Group (NYSE:UNH). Following these results, Myriad Genetics reduced its guidance by approximately $35 million at the midpoint, citing underperformance in its Genesight and HCT products. Additionally, the company’s long-range plan growth rate has been adjusted to a high single-digit to low double-digit range.
In response to these developments, Jefferies lowered the price target for Myriad Genetics to $5.00 from $11.00, maintaining an Underperform rating. Similarly, Scotiabank (TSX:BNS) analysts downgraded the stock from ’Sector Outperform’ to ’Sector Perform’, reducing the price target to $6.00 from $20.00. Both firms expressed concerns over the company’s near-term prospects and are taking a cautious approach. Scotiabank, in particular, is looking for consistent progress in the Oncology and Women’s Health segments before considering a more positive outlook.
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