On Dec 10, Zacks Investment Research upgraded Fluidigm Corp FLDM to a Zacks Rank #1 (Strong Buy). The company’s expanding product portfolio and impressive pipeline were the primary reasons that drove the upgrade.
Why the Upgrade?
Most recently, Time magazine picked Fluidigm’s Juno system as one of the top 25 inventions of 2015. The system’s expertise in pre-amplifying and analyzing DNA in a single step, thereby saving significant amount of time for testers, is particularly impressive. The system needs a tiny amount of DNA to boot and shows results much faster (three hours) than traditional devices (five to six hours).
We believe the Time magazine recognition will provide a significant boost to the Juno system’s adoption among scientists and researchers, thereby driving Fluidigm’s top line further.
Meanwhile, the company’s expanding product portfolio and strong pipeline is a key growth catalyst in our view. Fluidigm started shipping the new high throughput single cell MRNA sequencing chips in the recently reported third quarter of 2015. The chips accounted for nearly 20% of the company’s C1 consumable sales in the quarter.
Moreover, new products like Callisto and Polaris promise strong customer growth in the fields of immunology, oncology, stem-cell biology and neuroscience. The Helios platform also continues to perform well, reinforcing management’s confidence in the product pipeline.
Further, genomic analytical system (Juno belongs to this group) sales are encouraging. Fluidigm noted that a significant part of the sales were driven by industrial customers, particularly clinical and agriculture (representing approximately 50% of unit sales).
Fluidigm plans to launch a new targeted resequencing sample preparation workflow on this platform in the first quarter of 2016. The product will primarily address the needs of the clinical and agricultural market, which should provide further growth opportunities for the company.
Estimate Revisions
The Zacks Consensus Estimate for fiscal 2015 remained steady at a loss of $1.87 per share over the last 7 days. Similarly, for fiscal 2016, the Zacks Consensus Estimate remained unchanged at a loss of $1.77 per share over the same time frame.
Other Stocks to Consider
One may also consider other favorably ranked players in the industry that look attractive at current levels. These include Masimo Corp MASI, Natus Medical BABY and Steris Plc STE. All the three stocks carry the same Zacks Rank as Fluidigm.
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