Genetic Analysis - Diagnostic company on growth - Mangold Insight Analys

Genetic Analysis, a microbiome diagnostic company, increased its total revenue to NOK 6,4 million in the first quarter. An increase of 32 percent compared to the same period last year. Sales, which include reagent kit and its GA platform, increased by 64 percent to NOK 4.1 million. Research grants amounted to NOK 2.3 million. The quarter sees as strong even if it did not live up to our estimates.

The positive trend for the microbiome market continues. Another microbiome altering drug has been approved by the FDA, which suggests that the demand for microbiome diagnostic tests will increase. Mangold estimates that Genetic Analysis is well positioned to capture an expected increased demand from labs and pharmaceutical companies. The company’s sales are increasing as more labs are installing the GA-map platform. For 2023, Mangold expects sales to increase by 86 percent to NOK 21 million. The company is expected to become EBIT positive by the end of 2024. In order to maintain a high pace of sales and product development Mangold believes that the company may need a capital injection.

Mangold has chosen to fine-tune the forecasts, which gives a fair value of the company amounting to NOK 4.47 per share. The target price is set at NOK 4.00 per share. The upside of the share is significant and for it to be materialized, it requires continued high growth and clear signs that profitability can be achieved.