Daniel Brennan, an analyst from TD Cowen, has initiated a new Buy rating on Biodesix (BDSX).
Daniel Brennan has given his Buy rating due to a combination of factors including the company’s leadership in the underpenetrated lung nodule diagnostics market and its impressive sales growth. Biodesix operates in a substantial addressable market with a serviceable addressable market (SAM) of over $4 billion and a total addressable market (TAM) of $20 billion that is currently only about 1% penetrated. Brennan highlights the company’s over 40% sales growth and anticipates a forward compound annual growth rate (CAGR) of approximately 27%, which he considers conservative. Moreover, he believes that Biodesix’s stock is trading at a discount compared to its peers, despite its strong growth prospects, high gross margins, and a clear path towards positive free cash flow by 2027.
Brennan’s optimism also extends to the company’s commercial strategy, particularly the scaling of its salesforce, which he sees as a key driver for adoption and education among doctors regarding Biodesix’s Nodify tests. This increased sales force could result in an additional 14-27% upside potential for the company’s growth. Furthermore, potential updates to lung cancer screening guidelines could serve as a long-term growth catalyst. Brennan is confident in the company’s financial trajectory, predicting it will reach cash flow break-even in 2027 with a projected free cash flow of approximately $6 million. Despite expecting the cash balance to decrease in the near term, he believes that stronger than forecasted top-line growth could enhance cash generation for Biodesix.
Brennan covers the Healthcare sector, focusing on stocks such as Pacific Biosciences, NeoGenomics, and Natera. According to TipRanks, Brennan has an average return of 6.4% and a 52.20% success rate on recommended stocks.
In another report released on May 9, Lake Street also maintained a Buy rating on the stock with a $3.00 price target.
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Biodesix (BDSX) Company Description:
Biodesix Inc is a data-driven diagnostic solutions company. The company’s artificial intelligence-based platform helps to discover, develop, and commercialize solutions for clinical unmet needs, with a primary focus in lung disease. The revenue is derived from two sources namely, providing diagnostic tests and providing biopharmaceutical companies with services that include diagnostic research, clinical research, development and testing services.
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