Investors had high hopes for Bionano Genomics (BNGO 3.88%) in the first few weeks of the year. The company highlighted the progress and strengths of its optical genome mapping (OGM) technology at a five-day symposium. Then Bionano progressively raised $335 million in operations including public stock offerings. As a result, the stock soared more than 400% from the start of the year through a peak in February.

Since, the shares have dropped more than 50%. Now, the question is whether the share performance we saw a few weeks ago was an exception -- or whether this genome analysis company may produce steady gains over the long term. Let's take a closer look at the situation right now and what's ahead.

Researchers study images of DNA on their computer screens in a lab.

Image source: Getty Images.

An important step in testing

Bionano specializes in OGM using its Saphyr analysis system. In genome analysis, OGM allows researchers to find large structural variations. This is an important step in testing for genetic diseases. Is next-generation sequencing a rival technology? Not necessarily. Sequencing detects small variants but often misses these important larger ones. So, it's fair to say OGM and sequencing are complementary.

The coronavirus pandemic weighed on the genomic testing market last year as some labs temporarily reduced operations. Bionano's full-year revenue fell 16% to $8.5 million. And the company's net loss widened.

Even in this context, though, Bionano showed growth. The company's installs of the Saphyr system increased by 24 to a total of 97 last year. And Bionano's acquisition of Lineagen helped it increase fourth-quarter revenue by 43% to $4 million. The Lineagen business offers diagnostic testing for neurodevelopmental disorders.

With this acquisition and Bionano's Saphyr, it looks like growth is in its early stages -- and there's a lot more to come. In Bionano's earnings call, the company offered a timeline of plans for this year. In the third quarter, the company plans on launching prenatal assays and broadening its selection of pediatric assays.

One of Bionano's priorities is building up the number of published studies showing Saphyr's capabilities. It expects results from pediatric clinical studies in the fourth quarter. This should help Bionano sign on new customers -- and encourage reimbursement by third-party payers in the U.S.

The next-generation Saphyr

Also in the fourth quarter, Bionano aims to complete its prototype of a next-generation Saphyr. The goal is to serve both community cytogenetics labs and higher-throughput operating labs. This will result in a fourteenfold increase in the number of Saphyr-analyzed genomes per year.

The company also expects more Saphyr installs this year. It forecasts a 50% year-over-year increase to 150 systems.

It's too early to clearly put a number on the future OGM market. But, right now, Bionano says the prenatal and pediatric market totals about $3.5 billion. As more and more tests are routinely performed on newborns, it's easy to imagine this figure rising dramatically.

So, now, the big question is whether you should buy shares of this innovative healthcare company in April.

Let's look at share price. At this level, the shares are trading for less than even Wall Street's lowest 12-month share price estimate. In fact, the average estimate calls for the stock to climb more than 100% over the coming 12 months.

Investors got ahead of themselves when they pushed Bionano up sevenfold in a short period of time earlier this year. But I don't think the stock's gains are over. As I said earlier, Bionano is at the beginning of its story. The efforts the company is making today should pay off in the long term.

Before you dive in, though, some words of caution: In the genomics field, there is always the risk of disruptive technologies eventually emerging and taking market share. So before buying sequencing or mapping companies, be sure you're comfortable with risk. And remember that Bionano hasn't yet reached steady revenue or profitability.

All of this means Bionano is best left to aggressive investors. And for these investors, Bionano is a great stock to buy in April.