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Biolase stock target cut by Ascendiant Capital, retains Buy rating

EditorAhmed Abdulazez Abdulkadir
Published 04/01/2024, 05:14 AM

On Monday, Ascendiant Capital adjusted its outlook on Biolase (NASDAQ:BIOL), a company traded on NASDAQ under the ticker BIOL, by slashing its price target significantly to $4.00, a sharp decrease from the previous target of $15.00. Despite this reduction, the firm maintained a Buy rating on the stock.

The lowered price target comes amidst the analyst's belief that Biolase is making progress toward returning to growth and profitability, albeit with some inconsistency. The projection for the company includes a solid improvement in the year 2024, with an anticipated growth rate of 4%, following a modest increase of 1% in 2023 and a robust performance of 24% growth in the previous year.

The analyst expressed confidence in Biolase's product lineup and its potential to capitalize on the expanding dental market. The company's consistent sales execution and the emergence of new sales opportunities were also cited as factors that could contribute to its momentum in the near future.

Biolase's innovative products are expected to play a key role in the company's performance. The firm's optimism about the stock is based on the anticipated growth and profitability, which are seen as drivers for momentum in Biolase's stock value.

In conclusion, while the price target has been significantly lowered, the underlying Buy rating suggests that the firm sees long-term value in Biolase's shares against the backdrop of the company's expected growth trajectory and market opportunities.

InvestingPro Insights

As investors digest the new price target from Ascendiant Capital for Biolase, it's essential to consider the company's financial health and market performance. According to InvestingPro data, Biolase has a market capitalization of just over $6 million, reflecting its position as a smaller player in the market. The company has been experiencing a modest revenue growth of 1.45% over the last twelve months as of Q4 2023, which aligns with the analyst's projection of a gradual return to growth. Despite this, they are operating with a significant debt burden and have been quickly burning through cash, as noted in two of the InvestingPro Tips.

Furthermore, the stock's recent price movements have been marked by high volatility. Over the last month, the stock has seen a strong return of 20.51%, yet it has fallen significantly by 83.08% over the last three months. This volatility is a critical factor for investors to consider, especially those looking for stable investments. Biolase's stock has also been trading at a low revenue valuation multiple, which could be an indicator of undervaluation relative to its revenue, as per another InvestingPro Tip.

For those considering an investment in Biolase, it's worth noting that there are 14 additional InvestingPro Tips available that provide deeper insights into the company's financial health and stock performance. To access these tips and more detailed analytics, visit InvestingPro at https://www.investing.com/pro/BIOL and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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