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Canaccord Downgrades Quanterix From Buy to Hold

NEW YORK – Investment bank Canaccord Genuity on Monday downgraded Quanterix from a Buy rating to Hold and lowered its price target to $12 from a previous target of $40.

Canaccord analyst Kyle Mikson wrote in a note to investors that the "change is primarily driven by the lack of near-term visibility and catalysts that would be necessary to increase valuation levels."

During its Q2 2022 earnings call last week, Quanterix announced it is laying off around 130 employees, or 25 percent of its workforce, and refocusing its commercial efforts to improve the quality of its assays and its ability to manufacture them at scale.

Quanterix President and CEO Masoud Toloue said during the call that the costs of manufacturing its assays are currently not efficient in the long term and noted that assay quality problems have led to higher expenses for the company due to the costs and waste involved in reworking assays and the increased distribution costs involved.

"Although demand for Simoa products remains strong and the tempered revenue forecast is largely self-inflicted, we believe a more modest valuation should be warranted for such a growth profile," Mikson wrote.

"In our view, Quanterix could become a leader in low- to mid-plex proteomics in the translational and clinical markets over time," he added. "However, it remains to be seen if the company will be able to rightsize its current issues related to assay quality and cost structure. From our perspective, these issues occurred abruptly and likely should have been identified much earlier."