Please ensure Javascript is enabled for purposes of website accessibility

Why Berkeley Lights Stock Went Dark on Thursday

By Eric Volkman – Jan 6, 2022 at 12:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors were spooked by several numbers in the company's latest business update.

What happened

Thursday was an eventful day for digital cell biology company Berkeley Lights (BLI -3.45%)... but not in a good way. Following news of a c-suite departure and a business update, investors aggressively sold off the company's stock. At the end of the day, the shares suffered a steep fall of just over 39%.

So what

The vacating executive is none other than CEO Eric Hobbs, who is staying with Berkeley Lights by shifting to president of its antibody therapeutics business. He will remain in his current post and keep his seat on the board of directors until a replacement is found. The company has retained an executive search firm to aid in the hunt for that person.

Doctor seated with head in hands.

Image source: Getty Images.

But clearly a matter of more concern was Berkeley Lights' business update. The company provided selected preliminary and unaudited figures for full-year 2021. Revenue for the period is anticipated to come in at $84 million to $84.5 million; the lower end of that range would represent a nearly 31% improvement over the 2020 result.

During 2021, Berkeley Lights signed $115 million worth of new contracts with clients. Additionally, it managed to boost its recurring revenue by over 35% year over year.

The specialty healthcare company also proffered fresh guidance for 2022. It's forecasting that revenue will rise by around 30% compared to 2021. It also stated that "Partnership/services business revenue is expected to continue to grow, both in absolute dollars and as a percentage of total revenue, and anticipate this to fuel total company growth in 2023 and beyond."

Now what

That guidance was the problem. As Stifel analyst analyst Daniel Arias pointed out about this year's projections in a research note following the news, Berkeley Lights is "putting forth a growth forecast for 2022 that puts revenues below consensus ($110 [million] vs. the Street's $123 [million])."

Investors do not like when their growth stock holdings report lower than expected growth. We can expect today's bearishness to linger until Berkeley Lights has more positive news to report.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.