What happened
Genetic medical testing specialist Invitae (NVTA 25.93%) didn't pass the investment test for one researcher late on Thursday. The following day its stock took a more than 15% hit because of this estimation.
So what
After market hours on Thursday, financial services company Piper Sandler initiated coverage of Invitae stock. That wasn't necessarily beneficial for the biotech, as analyst David Westenberg rated the stock an underweight (i.e., sell) at a price target of $2.50 per share. Even after that 15% price dive, Invitae still trades at a rich level for Westenberg, at just over $3.
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"We think germline testing is becoming more commoditized and Invitae has a late start to somatic cancer," the prognosticator wrote in a research note, referring to two types of genetic screening for cancer.
"We model numbers below the Street," he added. Those estimates were not immediately available.
Only a clutch of analysts track Invitae. Some are more bullish than Westenberg on the company's prospects; on average, they're expecting the company to lift its total sales by 36% year over year in 2022, and another 35% next year. They are also collectively modeling a narrower per-share net loss for 2023.
Now what
Investors tend to be sensitive about takes like Westenberg's, since the typical biotech is heavily dependent on its core technology, or one (or very few) pipeline product(s). Not unusually for such a company, Invitae is also chronically unprofitable and is burning through its cash at a fairly quick rate.
It's no wonder, then, that the stock is now touching all-time lows. Analyses such as the new Piper Sandler take won't help the situation.
