Breaking News: Avid Bioservices (NASDAQ: CDMO) Receives Positive Endorsement from KeyBanc Analyst
In a recent development, a KeyBanc analyst has reiterated an Overweight rating and a $14.00 price target for Avid Bioservices (NASDAQ: CDMO) shares. The analyst's confidence in the company's revenue prospects has been bolstered following a recent gathering with the management during the BioProcess International (BPI) conference.
Avid Bioservices reported robust fiscal first-quarter results, with new orders exceeding expectations and more than doubling the previous quarter's figures. Despite a slower uptake in the company's new cell & gene therapy (CGT) facility, the overall business is focused on late-stage programs, which could lead to a significant revenue increase upon the approval of high-volume products.
The potential impact of the BioSecure Act was also highlighted, which could drive new orders by compelling U.S.-based customers to seek domestic Contract Development and Manufacturing Organizations (CDMOs) like Avid Bioservices over international providers. The company is well-positioned to capture business in this scenario, with a pipeline that includes several high-volume product candidates.
While some customers continue to utilize services from international providers, there is a prevailing belief within the industry that the BioSecure Act will likely be enacted, leading to a shift towards domestic alternatives. This could open up opportunities for Avid Bioservices to expand its client base.
In other news, Avid Bioservices reported mixed financial results for the first quarter of fiscal year 2025, with a revenue increase driven by higher process development revenues but also facing a net loss and increased expenses. Despite these challenges, the company secured new project agreements contributing to a record backlog.
InvestingPro Insights show that while Avid Bioservices is not currently profitable, it has shown strong market performance over the last few months. The company's high Price to Book ratio suggests that investors are pricing in significant future growth expectations, aligning with the analyst's positive outlook on the company's revenue prospects.
Overall, Avid Bioservices' resilience amid industry challenges, potential growth opportunities, and market performance indicate a promising future for the company. Investors should keep an eye on developments in the biopharmaceutical services sector and the potential impact of regulatory changes like the BioSecure Act on the company's prospects.