On Wednesday, BTIG maintained its Buy rating on Bionano Genomics (NASDAQ:BNGO) but reduced the stock's price target to $3.00 from $6.00. The adjustment follows a series of strategic updates announced by Bionano during its fourth-quarter earnings call, which included a significant restructuring initiative and a further reduction of its full-time employee (FTE) count by 38%.
This move is part of a strategy to decrease annual operating expenses by an additional $35-40 million, contributing to a cumulative reduction of $65-75 million since May 2023.
Bionano Genomics has also decided to discontinue certain legacy service tests, such as Fragile X, which are not central to its Optical Genome Mapping (OGM) technology. This decision is aligned with the company's cost-saving objectives and is expected to decrease annual revenue by approximately $7 million. Additionally, Bionano revealed for the first time that it is considering selling all or part of the company.
In its 2024 revenue guidance, Bionano anticipates revenues of $37-41 million, which would represent a year-over-year increase of 2-14%. This projection accounts for the discontinued non-OGM services. It also suggests a 22-33% year-over-year revenue growth for its core OGM business, supported by the anticipated placement of 80-100 new systems.
The restructuring efforts by Bionano are seen as a response to the current challenging capital markets environment, which compels businesses to concentrate on their primary competencies. BTIG has revised its revenue estimates for Bionano to reflect the latest updates from the company, reaffirming the Buy rating while lowering the price target.
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