Renowned investor Cathie Wood has been a strong advocate of genomics having the potential to be one of the biggest disruptive trends in the coming months after electric vehicles (EVs). As the founder and manager of the world’s largest actively traded ETF company, Ark Investment Services, Wood entered the limelight by generating big gains from her investments in Tesla, Inc. (TSLA).
Her genomics-focused Ark Genomic Revolution ETF (ARKG) has a substantial stake in Adaptive Biotechnologies Corporation (ADPT), CareDx, Inc (CDNA), and Berkeley Lights, Inc. (BLI). As of September 3, ARKG held 4,743,667 shares of ADPT, representing a 2.1% weighting in the portfolio. CDNA is one of ARKG’s top 10 holdings, representing 3.1% of the portfolio, while BLI represents 1.5%.
Given the industry’s solid growth prospects, Wall Street analysts are bullish on Cathie Wood’s top holdings—ADPT, CDNA, and BLI.
Adaptive Biotechnologies Corporation (ADPT)
ADPT is a biotechnology company focused on using the biology of the adaptive immune system to develop the diagnosis and treatment of disease. The Seattle, Wash., company’s immune medicine platform generates clinical immunomics data to decode the adaptive immune system.
On August 4, the company announced the appointment of Nitin Sood to the newly created position of chief commercial officer. Sood has more than 15 years of proven commercial experience in leading life sciences and diagnostics companies, most recently at Guardant Health. Sood’s experience and expertise should aid ADPT’s commercial expansion.
ADPT’s total revenue increased 83.5% year-over-year to $38.51 million in its fiscal second quarter, ended June 30. Its sequencing revenue stood at $18.56 million, up 132.4% from the same period last year. In addition, its development revenue rose 53.4% from the prior-year quarter to $19.95 million over this period.
A $37.07 million consensus revenue estimate for the fiscal third quarter, ending September 2021, indicates a 57.2% increase year-over-year. Also, the Street expects the company’s revenue to rise 56.3% from the prior year to $153.82 million in the current year. Furthermore, the company’s EPS is expected to grow 4.3% per annum over the next five years. ADPT has a notable earnings surprise history as well; it beat the consensus EPS estimates in three out of the trailing four quarters.
Over the past five days, the stock gained 12.6% in price to close yesterday’s trading session at $39.51. ADPT gained 9.8% over the past month.
Of the three Wall Street analysts that rated ADPT, two rated it Buy, while one rated it Hold. The $62.33 median price target indicates a potential 57.8% upside from its last closing price. The 12-month price targets range from a low of $52.00 to a high of $75.00.
CareDx, Inc (CDNA)
CDNA is a molecular diagnostics company. It is focused on the discovery, development, and commercialization of clinically differentiated diagnostic surveillance solutions for transplant patients. CDNA is based in Brisbane, Calif.
On June 8, CDNA announced the acquisition of Transplant Hero LLC, a New York-based provider of a mobile application that supports the needs of transplant patients. The acquisition of Transplant Hero builds on AlloCare, the comprehensive CDNA mobile health app. Regarding this acquisition, Reg Seeto, the President and CEO of CDNA, said, “Transplant Hero’s easy-to-use interface and transplant focus allows us to expand into different organs. We will be able to leverage Transplant Hero’s well-established social media presence to augment AlloCare, which has been built around patients from kidney transplant centers.”
On June 3, CDNA announced a strategic agreement with OrganX, an independent organization that fosters research and access to advanced health technologies, to develop clinical decision support tools across the transplant patient journey. This partnership could allow CDNA to further expand its leadership in multi-modality testing by integrating AI platforms.
CDNA’s total revenue increased 77.5% year-over-year to $74.19 million in its fiscal second quarter, ended June 30. Its adjusted EBITDA grew 345.8% from its year-ago value to $6.81 million. Its non-GAAP net income improved 240% year-over-year to $5.88 million. The company’s non-GAAP EPS increased 175% year-over-year to $0.11.
Analysts expect CDNA’s revenues to increase 50.2% year-over-year to $288.68 million in the current year. A $0.26 consensus EPS estimate for the current year indicates a 13% rise from the last year. In addition, CDNA surpassed the Street’s EPS estimates in three out the trailing four quarters.
Shares of CDNA have gained 134% in price over the past year to close yesterday’s trading session at $75.35.
Among the six Wall Street analysts that rated CDNA, five rated it Buy, while one rated it Hold. The $107.40 median price target indicates a potential 42.5% upside from its last closing price. The 12-month price targets range from a low of $95.00 to a high of $118.00.
Berkeley Lights, Inc. (BLI)
BLI is a digital cell biology company that is focused on enabling and accelerating the rapid development and commercialization of biotherapeutics and other cell-based products. BLI is headquartered in Emeryville, Calif.
On August 11, BLI announced a multi-year agreement with Bayer to develop and perform high-throughput functional screening workflows to accelerate and expand the discovery of next-generation traits. The agreement is an opportunity for the company to deploy its technologies into new, large market segments and promote BLI’s growth.
On July 21, BLI announced a strategic collaboration with Thermo Fisher Scientific to address challenges in commercial-scale viral vector manufacturing, subsequently accelerating the entry of cell and gene therapy products into the clinic and marketplace. This collaboration should allow the company to emerge as a prominent player in the next-generation genomics space.
For its fiscal second quarter, ended June 30, BLI’s revenues increased 82.1% year-over-year to $19.25 million. In addition, its product revenue grew 43% from its year-ago value to $13.02 million. BLI’s gross profit came in at $12.73 million, indicating an 82.8% rise year-over-year.
The Street expects BLI’s revenues to rise 41.5% year-over-year to $91.02 million in the current year. The company’s EPS is expected to improve 32.4% year-over-year in the same period.
BLI has gained 7.9% in price over the past five days to close yesterday’s trading session at $36.71.
Of the four Wall Street analysts that rated BLI, two rated it Buy, while two rated it Hold. The $64.00 median price target indicates a potential 74.3% upside from its last closing price. The 12-month price targets range from a low of $61.00 to a high of $66.00.
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ADPT shares were trading at $39.42 per share on Tuesday afternoon, down $0.09 (-0.23%). Year-to-date, ADPT has declined -33.33%, versus a 21.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
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