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Investing.com - Standard BioTools Inc (NASDAQ:LAB) maintained its Sector Weight rating at KeyBanc, with analyst Paul Knight citing the company’s challenging near-term outlook but potential for acquisitions following its SomaLogic divestiture. According to InvestingPro data, the company currently appears undervalued based on its Fair Value analysis, despite showing mixed financial health indicators with an overall "GOOD" rating.
In its first earnings report since announcing the SomaLogic divestiture, Standard BioTools reported a revenue beat but missed bottom-line expectations. The company initiated core revenue guidance of $78 million to $83 million. While the company achieved impressive revenue growth of 34% in the last twelve months, InvestingPro analysis indicates the company is quickly burning through cash, with analysts not anticipating profitability this year.
KeyBanc highlighted that Standard BioTools faces significant challenges due to its high exposure to U.S. academic customers, which represent approximately 30% of fiscal year 2024 revenue and an even larger portion of continuing operations.
Management expects to have at least $550 million in cash (approximately $1.45 per share at current share count) once the SomaLogic divestiture closes in the first half of 2026. This substantial cash position could fund future acquisitions in what management described as a developing environment for compelling asset values.
With approximately 20% of shares owned by Casdin Capital and 16% by Viking Global Investors, KeyBanc now views an investment in Standard BioTools primarily as a bet on management’s ability to find attractive acquisition targets, though the firm maintains its Sector Weight rating due to limited near-term visibility.
In other recent news, Standard BioTools Inc. has announced the sale of its SomaLogic business to Illumina (NASDAQ:ILMN), Inc. for up to $425 million in cash. The transaction involves $350 million in upfront cash and up to $75 million in milestone payments, alongside 2% royalties on specific product sales for a decade. Additionally, Standard BioTools retains certain commercialization rights related to Single SOMAmer reagents. The company has also been selected by Precision Health Research, Singapore (PRECISE-SG100K) for its SomaScan 11K Assay to analyze 100,000 plasma samples, following a thorough evaluation of various proteomics options. In corporate governance, Standard BioTools’ board approved restricted stock unit awards for CEO Michael Egholm and CFO Alex Kim, with Dr. Egholm receiving 3,000,000 RSUs. These developments highlight recent strategic decisions and corporate actions undertaken by Standard BioTools.
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