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Jefferies starts 'Buy' on BioLife Solutions stock, eyes set on cell therapy market

EditorEmilio Ghigini
Published 04/04/2024, 04:59 AM

On Thursday, BioLife Solutions (NASDAQ:BLFS) stock, received a positive outlook from Jefferies, initiating coverage with a Buy rating and setting a price target of $22.00. The endorsement comes as the company prepares to divest its freezer business, a move expected to streamline its operations.

Jefferies highlighted that the divestiture of the freezer segment will allow BioLife Solutions to present a "cleaner story" as a pure-play entity in the cell and gene therapy space. This strategic shift is anticipated to lead to a more focused business model revolving around its cell processing tools and storage platform. With over 95% recurring revenue, the firm is poised for structurally higher double-digit growth, significant margin expansion opportunities, and improved cash flow.

The financial institution drew parallels between BioLife Solutions and other pure-play bioproduction companies, noting its specialized offerings to a diversified client base in both clinical and commercial biotech sectors. These factors contribute to a solid competitive moat due to sticky revenue streams.

The price target of $22.00 set by Jefferies is based on approximately 8.5 times the company's estimated 2025 enterprise value to revenue, a premium compared to peers but aligned with industry standards. This valuation reflects a roughly 35% discount to Repligen (NASDAQ:RGEN) Corporation (NASDAQ:RGEN), yet remains consistent with the market positioning of other high-growth companies in the sector.

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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