Pendulum has overcorrected to the left.
Do not believe this management team is interested in getting bought out. They have too good. Free lunches, free stock options, bonuses for negative growth, etc. They do not care about shareholders, that's obvious.
However, time for correction has arrived. Estd annual revenue for 2015 of $130M x 2 (conservative factor)= $260M valuation = $2.20/share = reflects fair price today.
Near term drivers:
1. If SQNM EnBanc hearing is accepted, should correct to $3+ quickly
2. Any hint about revenue growth, which is expected in response to new contracts for high risk market (despite price competition), growth in pool revenue, growth in reimbursement for average risk market will be a positive. Expect revenue to correct to $160M for 2016. Price should correct to $160M x 2.5 = $400M = $3.40/share
3. Announcement of new partner to finance Liquid Biopsy development and market penetration will be a big boost in the near term.
4. Cash on hand is estimated to be at $70M at year end 2015. Announcement of tighter cash burn controls (not to exceed $24M in 2016) with profitability projection by end of 2016 will be a major credibility booster. It will prove they will end 2016 with >$45M on hand obviating the need to issue a secondary offering in the near future.
Look for sentiment to change after next conference call.
