Oppenheimer pick: Bionano

 

Bionano Genomics: Implied upside of 474%

A second supercharged growth stock with monumental upside, at least according to one Wall Street analyst, is small-cap genome analysis company Bionano Genomics (BNGO -4.31%). If Oppenheimer analyst Francois Brisebois is correct, Bionano shares will hit $12 in 2023, which would represent upside of a cool 474%.

Although Brisebois is the current analyst covering Bionano for Oppenheimer, it was his predecessor, Kevin DeGeeter, who primarily laid out the case for Bionano Genomics running to $12. In DeGeeter's view, Bionano's optical genome mapping (OGM) system, known as Saphyr, has demonstrated that it's faster, less expensive, and in many ways more effective at identifying structural genome variations than other OGM systems. 

One thing investors don't have to worry about with Bionano Genomics is a lack of data demonstrating Saphyr's efficacy. Over the past two years, the company has released numerous studies and data points extolling Saphyr's ability to recognize structural variations in everything from various types of cancer to genetic disorders and recurrent pregnancy loss. In theory, Saphyr can play a key role in helping researchers and drug developers fight hard-to-treat diseases.

Another positive for Bionano Genomics is its healthy cash position. After its share price went parabolic to begin 2021, management wisely chose to issue stock to raise plenty of capital. The company ended September with approximately $180 million in cash, cash equivalents, and available-for-sale securities.  That's more than enough to offset quarterly losses as the company continues to innovate and look for ways to expand Saphyr's utility.

So, why is Bionano Genomics at $2.09 per share and not $12? The answer to that question largely has to do with Saphyr not being an approved diagnostic system by the U.S. Food and Drug Administration (FDA). Without this approval, Saphyr's utility is limited within the United States. It's not exactly clear if and when Saphyr might get the green light from the FDA, either.

Although Bionano's cash does provide a somewhat safe floor, the ceiling proposed by Brisebois and DeGeeter doesn't seem achievable without FDA support.

https://www.fool.com/investing/2022/12/06/3-growth-stocks-with-393-to-1153-upside-in-2023/