For Penny Investors, Biocept Stock Makes a Good Speculative Play

Is there room left right now to talk about healthcare companies not connected in any way to a COVID-19 test, vaccine or treatment? Let’s try.

Over the past 3 years, Biocept (BIOC) stock has been punished to the tune of a mighty 99.50% decline. Unsurprisingly, the stock is extremely cheap, with each share costing a miniscule $0.27 – enough to put off most investors. But one analyst believes the oncology diagnostics company is heading in the right direction.

Maxim’s Jason McCarthy reiterated his Buy rating along with a $1.00 price target. The figure implies potential upside of a massive 257%. (To watch McCarthy’s track record, click here)

Along with the vote of confidence, McCarthy has lowered 2020 sales estimates to $8.3 million from $9.4 million on account of the ongoing COVID-19 disruption. As a side note, Biocept has been approached to develop a COVID-19 test, but has declined so far and remains focused on oncology testing.

So, what does McCarthy see in a company whose share price has declined so acutely? For starters, the analyst notes Biocept’s growth. Last week, the company released its 4Q19 earnings report with sales of $1.8 million in the quarter indicating year-over-year growth of 108% and an increase of 17% from the prior quarter. “Biocept is feeling the positive effects of management’s efforts over the past year to streamline the company’s testing platforms and layer in new tests,” noted McCarthy.

Additionally, McCarthy argues that management’s efforts to strengthen the company’s strong balance sheet is a “key factor” in his positive assessment and should help it focus on growing the business. Biocept exited 2019 with $9.3 million in cash but raised a further $17 million from two equity financings in March and warrant exercises.

Sealing the deal for the Maxim analyst, is the company’s differentiated status in the testing space.

McCarthy said, “The inclusion of testing circulating tumor cells (CTCs) along side circulating tumor DNA (ctDNA) is differentiating and should continue to drive adoption, build awareness and keep Biocept above the noise of what can be viewed as a ‘crowded’ cancer testing space.”

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