Updated Aug 19 at 2:50pm ET.
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The company reported a loss of 30 cents per share, slightly more than the 26 cents analysts expected, on revenue of about 22.4 million dollars. While the bottom line was a bit soft, the underlying business is scaling quickly. Clinical test volume jumped 199 percent compared to last year, reaching over 10,000 tests in the quarter.
This growth is being fueled by new Medicare coverage for its NeXT Personal test, which helps doctors monitor how patients respond to cancer treatments. The company secured two more coverage approvals this quarter for solid tumors and breast cancer. These regulatory wins are critical because they allow more doctors to bill for the tests, turning a specialized research tool into a high-volume clinical product.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company has entered a definitive agreement to be acquired by Tempus AI in a deal valued at approximately 1.5 billion dollars. Under the terms, shareholders will receive 16.25 dollars per share, which is mostly paid in Tempus stock. Tempus has the option to pay up to half of that amount in cash.
This merger combines the company's ultra-sensitive cancer detection tests with Tempus' large library of clinical data and artificial intelligence tools. For shareholders, the deal provides a clear exit at a fixed price, though the final value will depend on where Tempus stock is trading when the deal closes. The boards of both companies have already approved the transaction.
Source: 8-K filing
Needham lowered its rating on the stock to Hold. The move comes immediately after the announcement that Tempus AI will acquire the company for 16.25 dollars per share.
This is a routine response to a merger. Because the stock is now anchored to the buyout price, there is less opportunity for the kind of independent growth that would justify a Buy rating. The stock's future value is now tied to the successful closing of the deal rather than the company's standalone performance.
Lake Street lowered its rating on the stock to Hold from Buy, setting a price target of 16.25 dollars. This change aligns the firm's target exactly with the price Tempus AI has agreed to pay to acquire the company.
When a company agrees to be bought at a specific price, analysts often move their ratings to neutral. This reflects that the stock is now likely to trade near that buyout price until the deal closes, leaving little room for the shares to move higher on their own.
Source: Lake Street
Analysts recently downgraded the stock following a flurry of activity surrounding the company's proposed sale. Nine of 12 analysts rate the stock a buy, but the average target of $15 is slightly below the current price.
The company has a mixed record of meeting expectations, but its clinical revenue is now growing at a triple-digit pace as more doctors adopt its cancer tests.
| Expectation | |
|---|---|
| EPS | $-0.26 |
| Revenue | $22M |
