In a research report issued today, Edison analyst Katherine Genis weighed in today with a few insights on StemCells Inc (NASDAQ:STEM), as the company has a couple of important clinical trials underway. The analyst reduced her fair value to $1.82 (from $1.95) which represents a potential upside of 323% from where the stock is currently trading.

Genis wrote, “StemCells has announced transplantation of the first patient in a recently initiated Phase II trial, evaluating its human central nervous system stem cells (HuCNS-SC) as a treatment for dry age-related macular degeneration (AMD). Progression into the Phase II RADIANT trial was supported by the top-line results of its Phase I/II dose-ranging trial in dry AMD announced in June. Additionally, the company began dosing the first cohort in its Phase II PATHWAY study in cervical spinal cord injuries (CSI) earlier this year. At a price of $0.41, the shares offer considerable potential, currently trading significantly below our risk-adjusted fair value of $1.82 per share.”

“On 6 August, StemCells reported Q215 results, which were generally in line with our expectations. Our DCF-based valuation of $198m ($1.82 per share) is adjusted only slightly from $205m ($1.95 per share) mainly on cash usage over the quarter. We do not include potential share dilution from current out-of-the-money warrants and restricted stock. The company’s cash runway should enable operations to be funded into 2016,” the analyst added.

All the 4 analysts polled by TipRanks rate StemCells stock a Buy. With a return potential of 520.3%, the stock’s consensus target price stands at $2.67.

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