NEW YORK (GenomeWeb News) – Investment firm Leerink Swann today began coverage of Fluidigm with an "Outperform" rating and a $17 to $18 valuation.
In a research note, analyst Dan Leonard said that the addressable market for the South San Francisco, Calif.-based company, which went public last month, is poised to grow to more than $600 million from $250 million in the next three years, with growth drivers that include downstream analysis of sequencing and microarray results, single cell analysis, targeted sequencing, agriculture/livestock genotyping, and digital PCR.
"As one of the market leaders in mid-density PCR, we believe Fluidigm is well-poised to capitalize on this market growth," Leonard wrote.
The company's technology simplifies experimental workflow, increases throughput while driving down cost, and enables research that previously was "impractical," he continued. Fluidigm's microfluidics technology for mid-density genetic analysis should result in revenue growth of more than 25 percent during the next several years, and "investors will pay up for this type of growth in the small cap genomics space."
Leonard noted that the company has risks associated to its business in Japan, which accounted for 13 percent of total sales in 2009. Through the first nine months of 2010, Japan was 8 percent of total sales. Before the recent earthquake, Leonard had expected that figure to tick back up to 2009 levels going forward. Nonetheless, the "earthquake-related disruption does not alter our long-term view," Leonard said.
In early morning trading on the Nasdaq, shares of Fluidigm were down 1 percent at $15.24.