On Monday, Jefferies assumes coverage on CryoPort (NASDAQ:CYRX), a company specializing in cryogenic cold-chain logistics, with a Buy rating and an increased price target of $21.00, up from the previous target of $17.00. The firm highlighted CryoPort's position as a leader in the cell and gene therapy (CGT) industry, noting its support of commercially available therapies and a substantial pipeline of clinical trials.
CryoPort's revenue guidance for 2024 indicates a growth of 4-8% year-over-year, setting what Jefferies considers a more achievable benchmark following the performance of the last two years.
The analyst pointed out that the company's commercial biopharma revenues, which make up about 10% of its business mix, are expected to continue the previous year's growth trend of over 30%. This suggests a low- to mid-single-digit growth for the remainder of the business, with potential for upside in the second half of 2024 due to improved funding and new therapy approvals.
The firm also noted one area of concern is the operational expenditure, which has increased by approximately 30% since 2022, compared to a revenue growth of 3-4%. Despite this, the price target set by Jefferies is based on an estimated 4 times the 2025 expected enterprise value to revenue ratio, which aligns with the valuation multiples of other small-cap companies in the Tools sector.
InvestingPro Insights
Following the initiation of coverage by Jefferies, CryoPort (NASDAQ:CYRX) has been under the spotlight for investors looking for opportunities in the cryogenic cold-chain logistics sector. According to recent InvestingPro insights, CryoPort's market capitalization stands at a solid $898.25 million, reflecting investor confidence despite the company's challenges in achieving profitability. The firm's Price to Earnings (P/E) ratio, as of the last twelve months ending Q4 2023, is -14.04, indicating that investors are willing to bet on its future growth potential despite current losses.
From an operational standpoint, CryoPort's gross profit margin was a robust 42.59% for the same period, showcasing its ability to maintain a strong profit on its services. However, the company's revenue saw a slight decline of 1.7% year-over-year, which aligns with the cautious revenue guidance for 2024 that Jefferies noted. The firm's stock has experienced significant volatility, with an 18.86% return over the last three months and a remarkable 46.72% increase over the past six months, emphasizing the InvestingPro Tip that stock price movements are quite volatile.
An InvestingPro Tip that stands out for potential investors is that CryoPort's liquid assets exceed short-term obligations, providing a cushion for operational flexibility in the near term. Additionally, the company operates with a moderate level of debt, which is a positive sign for risk-averse investors. On the downside, analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months, which could be a point of concern for those looking at bottom-line performance.
For those interested in further analysis and additional InvestingPro Tips, CryoPort has a total of 9 tips available on InvestingPro. Subscribers can use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering more in-depth insights and metrics to guide investment decisions.
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