On Monday, Benchmark initiated coverage on Know Labs (NYSE:KNW), a company focused on developing a noninvasive blood glucose monitor, with a Speculative Buy rating and a price target of $1.00. The technology, known as KnowU, utilizes a unique method of electromagnetic signal transmission to measure blood glucose levels without the need for finger sticks or skin inserts.
Know Labs' innovative approach involves microwave spectroscopy combined with machine learning algorithms, differing significantly from the traditional blood glucose meters and continuous glucose monitoring systems that are currently available. These conventional devices require either a finger stick to obtain a blood sample or the insertion of a small tube into the skin to collect interstitial fluid.
The company's proprietary Bio-RFID technology, which is the cornerstone of the KnowU system, has potential applications beyond glucose monitoring, such as measuring other analytes like ketones. This technology is protected by a broad intellectual property portfolio. Know Labs revealed its first-generation prototype in June 2023 and has set a goal to release a second-generation device with FDA clearance by FY2026.
The Speculative Buy rating reflects the analyst's recognition of the potential market impact of Know Labs' technology, particularly in the field of diabetes management. However, the $1.00 price target set by Benchmark does not account for possible international sales or revenue from the non-insulin-using Type 2 diabetes market, which the analyst notes could provide significant additional upside to the company's value.
InvestingPro Insights
In light of Benchmark's initiation of coverage on Know Labs, it's worth considering additional insights from InvestingPro. Know Labs is currently navigating financial challenges, evident from its rapid cash consumption and weak gross profit margins. These factors are crucial for potential investors to monitor, as they can impact the company's ability to fund its operations and bring its noninvasive blood glucose monitor to market.
Moreover, the company's stock price has shown considerable volatility, which may attract investors looking for high-risk, high-reward opportunities. However, it's important to be aware of the high Price / Book multiple, which suggests that the stock might be trading at a premium compared to its book value. On a positive note, Know Labs has demonstrated a strong return over the last three months, indicating a growing investor confidence in its market potential.
For those considering an investment in Know Labs, it is important to weigh these factors alongside the company's innovative approach and future growth prospects. For a deeper analysis and more InvestingPro Tips, visit InvestingPro. Additionally, use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. With 9 additional tips available on InvestingPro, investors can gain a more comprehensive understanding of Know Labs' financial health and stock performance.
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