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Piper Sandler has adjusted its outlook on Oxford Nanopore Technologies (ONT: LN) (OTC: ONTTF), reducing the price target to £1.60 from the previous £1.90.
Despite the lower target, the firm maintained its Overweight rating on the stock, signaling continued confidence in the company's prospects.
Oxford Nanopore has delivered a satisfactory performance for the first half of the year 2024, with revenues aligning with market expectations and a core revenue growth of approximately 12%.
The company has also confirmed its full-year guidance, anticipating a boost from increased population sequencing activities and improved sales force efficiency.
Improvements in the manufacturing process have significantly enhanced gross margins for Oxford Nanopore.
Although it is anticipated that the company will experience cash burn over the intermediate term, recent financing efforts and a comparatively higher margin profile than other less-scaled genomics companies are expected to mitigate balance sheet risks.
The firm's analyst highlighted the potential of Oxford Nanopore's technology to become the leading sequencing technology in the future. The analyst noted that the company's technologies have reached a pivotal moment and that its capital expenditure-free business model might be less vulnerable to macroeconomic pressures.
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