Biocept Inc (NASDAQ: BIOC) has been on a bit of a roller coaster ride as of late. A couple of trading sessions ago, the stock gained in multiples, followed by some serious declines yesterday and more gains today. With the roller coaster ride in mind, many are wondering if now is the time to get involved. Today, we’ll talk about:
- What BIOC is;
- the good, bad, and ugly to consider; and
- what we’ll be watching for ahead.
What Is BIOC
Biocept is a genetic testing company, most well known for its liquid biopsy cancer screenings. The company uses blood tests to determine if patients have cancer, and seems to be continuously adding new screenings to their long list of cancer types that they screen for.
The Good, The Bad, The Ugly
At the end of the day, BIOC is a stock that, while it does have popularity, the prospects are relatively slim. Here’s what I see as the good, the bad, and the ugly:
The Good: BIOC isn’t a clinical stage company. In fact, the company has many cancer screening tests on the market today. These screenings are also far less invasive than what you would expect. Instead of having to go under the knife for a tissue biopsy when a tumor is found, patients simply give blood, which is then assessed to see if there are signs of cancer in the blood. This non-invasive way in which the company goes about cancer screening is definitely something of value.
The Bad: While Biocept has made its name through non-invasive cancer screenings, the company is operating in an overwhelmingly competitive market. Not only do patients and clinicians have traditional methods of cancer screenings to fall back on, the liquid biopsy market is being flooded with new products. As a result, BIOC has a ton of competition to contend with in the space. Of course, this mounting competition has the potential to hinder the company’s growth.
The Ugly: This is where things get very bad. The truth of the matter is that BIOC is currently hemmorhaging money. The company is burning through a minimum of $5.7 million each quarter, and its financial foundation simply isn’t a strong one. In fact, the company recently announced a rights offering. Of course, rights offerings don’t cause dillution, which is a good thing, but it’s also a sign that the company is in serious need of money.
The truth is that, while the company has various products on the market and generating revenue, that revenue is coming nowhere near its expenses. As a result, the company is operating in the red. Considering that BIOC has various revenue generating products on the market at the moment, the prospects are slim. After all, the company has proven its ability. Sure, it can find cancer from blood, but with the competition out there, it simply can’t sell enough of its product to make a profit, and there is no near-term catalysts that suggest that this is going to change any time soon. So, investors are simply throwing money at a company that is likely to need more money in the future, rather than generating a return for its investors.
What We’re Seeing From The Stock Today
While investors work to decide if Biocept is worth their money, the stock is on a roller coaster ride, with dramatic gains and losses over the past few trading sessions. Today, the stock is on the gaining side of the coin. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:18), BIOC is trading at $8.08 per share after a gain of $1.53 per share or 23.26% thus far today.
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While BIOC is catching the attention of investors as of late, it’s important to do your due dilligence before making any investment. In this case, we believe that the company will only lead to losses for those that get involved at these levels. Sure, the company has a product that is generating revenue. However, it’s also spending far more than its making, leading to a need to look to the market for funds. Considering the competition and the company’s proven lack of ability to generate a profit in such a competitive environment, BIOC is one that I’d think twice before getting involved in. Nonetheless, we’ll continue to follow the company closely and bring the news to you as it breaks!
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