Morgan Stanley Downgrades Maravai LifeScience Holdings Inc. (NASDAQ:MRVI) Stock: What You Need to Know
Morgan Stanley has downgraded Maravai LifeScience Holdings Inc. (NASDAQ:MRVI) stock from Overweight to Equalweight, with a new price target of $10.00. This decision comes after a review of the company's second-quarter results and management's commentary.
The firm's revised forecasts for Maravai LifeSciences' third-quarter 2024 and full-year 2024 revenues remain unchanged at $68 million and $276 million, respectively. However, adjusted EBITDA estimates have been lowered to $17 million for the third quarter and $59 million for the year.
Morgan Stanley's new price target is based on a discounted cash flow analysis using a Weighted Average Cost of Capital (WACC) discount rate of 8.4% and a terminal growth rate of 3.0%. The $10 price target suggests a valuation of approximately 34 times the company's 2025 estimated EV/EBITDA.
The rationale for the discounted valuation is due to Maravai LifeSciences' lower anticipated top-line growth compared to its peers. The company's exposure to new drug modalities and uneven performance in recent years were also factors in the decision.
In other recent news, Maravai LifeSciences reported steady Q2 performance in 2024, with revenues of $73 million and an adjusted EBITDA of $17 million. The company provided a positive outlook for the full year of 2024, expecting an adjusted EBITDA margin between 20% and 22%.
InvestingPro Insights: Despite analysts not expecting profitability this year, Maravai LifeSciences has strong liquid assets and a moderate level of debt. However, the company has not been profitable over the last twelve months and has experienced a significant revenue decline.
InvestingPro Tips: Exercise caution due to downward earnings revisions and lack of expected profitability in the near term. For more insights, visit InvestingPro's dedicated Maravai LifeSciences page.
In summary, Morgan Stanley's downgrade of Maravai LifeScience Holdings Inc. (NASDAQ:MRVI) stock reflects concerns about the company's growth prospects compared to its peers. Investors should be cautious and consider the company's financial health before making any investment decisions.