NEW YORK – Investment bank Craig-Hallum said Wednesday that it has initiated coverage of Sophia Genetics with a Buy rating and a price target of $11 per share.
In a note to investors, Craig-Hallum analyst Bill Bonello wrote that the bank expects the firm to return to year-over-year double-digit growth after a down year of single-digit growth. "New applications, including solutions for liquid biopsy, comprehensive genomic profiling, and whole-genome analysis should open the door to new accounts" and increase utilization by existing customers, he wrote.
"If we are right, Sophia should command a multiple that is in line with other healthcare software-as-a-service companies," he wrote.
Switzerland-based Sophia offers software for next-generation sequencing analysis. "We expect this platform to be in high demand given the increasing quantity and complexity of data generated by NGS tests," Bonello wrote, adding that the market opportunity for Sophia's offering is between $1 billion to $2 billion, with competition coming from in-house bioinformatics solutions.
Bonello noted that 83 new customers went live on the Sophia platform over the trailing twelve months ended Q3, up from 60 for the prior-year period. Sophia also signed on 94 new customers during that same time period, up from 70 during the prior year.
In Wednesday morning trading on the Nasdaq, shares of Sophia were down 4 percent at $3.20.