Investidea: Cryoport company, because freezing

 

Today we have a highly speculative idea: take stock of Cryoport, a provider of software and products for drug development (NASDAQ: CYRX), in order to make money on a positive market environment for the company.

Growth potential and duration: 21% for 15 months; 42% for 3 of the year.

Why stocks can go up: there is a great demand for the company's solutions.

How do we act: take now 57,44 $.

When creating the material, sources were used, inaccessible to users from the Russian Federation. Hopefully, you know, what to do.

Our reflections are based on the analysis of the company's business and the personal experience of our investors, but remember: not a fact, that the investment idea will work like this, as we expect. Everything, what are we writing, Are forecasts and hypotheses, not a call to action. It is up to you to rely on our thoughts or not..

If you want to be the first to know, did the investment idea work, subscribe: as soon as it becomes known, we will inform.

 

Research, for example this and this, talk about, that the accuracy of target price predictions is low. And that's ok: there are always too many surprises on the stock exchange and accurate forecasts are rarely realized. If the situation were reversed, then funds based on computer algorithms would perform better than people, but alas, they work worse.

Therefore, we do not try to build complex models.. The profit forecast in the article is the author's expectations. We indicate this forecast as a guideline: as with the investment in general, readers decide for themselves, it is worth trusting the author and focusing on the forecast or not.

What the company makes money on

The company supplies its customers with various temperature control solutions.

According to the company's annual report, its proceeds are divided as follows.

Services — 70,26%. Cloud company platform, which allows you to manage logistics in the field of drug development, providing supplies of temperature sensitive materials. The delivery services of such materials are also taken into account here.. Segment gross margin - 46,62% from his proceeds.

Products — 29,74%. Supply of various goods, needed for storage of temperature-sensitive materials. The company itself does not manufacture these goods - this is done for it by third-party firms in accordance with the specifications, indicated Cryoport.

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Segment gross margin - 45,12% from his proceeds.

The main consumers of the company's products are medical institutions. According to the structure of clients, the revenue is distributed as follows:

  • biotech- and pharmaceutical companies - 84,36%;
  • veterinary medicine - 9,97%;
  • reproductive medicine - 5,67%.

By regions, the company's revenue is divided as follows:

  • America - 63%;
  • Europe, Middle East and Africa - 25,8%;
  • Asian-Pacific area - 1,2%.

Инвестидея: Cryoport, потому что заморозка

Инвестидея: Cryoport, потому что заморозка

Arguments in favor of the company

Perspectively, as it were. All major markets of the company have good prospects to a greater or lesser extent..

The main market - biotech and pharmaceuticals - a priori implies huge expenses on the part of customers for the creation of new drugs. All drugs have a patent expiration date, and when it expires, competitors get the right to produce cheap analogs.

Drug development takes a very long time - until 7 years - and requires a lot of money. Therefore, pharmaceutical companies are forced to spend insane amounts of money on R&D on a constant basis., just so as not to lose in revenue. So Cryoport is doing well on this front..

With veterinary medicine, the growth rate is not that great, but still this market, according to company estimates, will grow to 2026 on average by 5,8% in year. With regard to reproductive medicine, here the company expects growth rates in the region 9,8% to 2026.

By the way, there is a Progyny company, reproductive health worker, and it is distinguished by very high revenue growth rates and, together with similar companies, can serve as a good generator of order growth for Cryoport.

Cryoport is a fast growing company. This may overtake the lovers of everything "promising" in her actions.. Considering, that its capitalization is only 2,62 billion dollars, she can easily be pumped up by the chatting efforts of Robinhood users.

Can buy. Given the high demand for R&D, I find, that the company may well be bought by some Danaher, fortunately, the company recently released an excellent report. Considering Cryoport's price and nearly two trillion US M&A deals this year, buying Cryoport even at the highest price will be a drop in the ocean.

What can get in the way

Unprofitableness. Lack of profit suggests price volatility, and small capitalization is more likely a minus here: such stocks may well “walk down” by 30-50% per session.

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And unprofitableness is a big minus, as the rate hike is coming, because this means a rise in the cost of loans. Credit conditions in the USA are now the most favorable for a very long time., and even a slight deterioration can negatively affect the company's accounting.

It is also possible, that the company if it does not go bankrupt, then it will be on the verge of bankruptcy - and then someone will buy it at a reduced price. In this case, we will not earn on these promotions..

Инвестидея: Cryoport, потому что заморозка

What is the bottom line

We take shares now by 57,44 $. And then there are two options:

  1. we wait 70 $ and sell. I think, that the company will reach this level in the next 15 months;
  2. we are waiting for the price to return to the indicators of January this year - 82 $. I think, that this level of quotes has been reached in three years.

But you should still consider the volatility and riskiness of these stocks..

 

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