Fulgent Genetics

Stock: FLGT

Rating: Good

Author: Waleed M. Tariq

Summary

  • Fulgent Genetics offers COVID-19 and genetic tests.
  • Core revenue increased and diluted EPS doubled Year-over-Year.
  • Omicron’s proactive core business operations make me optimistic about Fulgent’s shares.

Bullish

  • Fulgent Genetics is growing because to COVID-19 testing.
  • FLGT has a strong balance sheet, strong financial performance, and targeted investments.
  • COVID revenue has been transformed into cash and cash equivalents, which should surpass $1 billion by year’s end.

Bearish

  • COVID-19 testing services may be dropping, hurting the company’s growth.

Leveraging COVID-19

  • Since introducing COVID-19, income has risen 1295% to $421 million. In 2020-2021, the stock rose from $17 to $189.

Ahead

  • Fulgent’s NGS platform will provide sequencing data to the CDC for a large-scale genomic study of the virus using random U.S. samples.

Future-proof

  • The next annual report will outline how the corporation will use its cash reserves. More investments and acquisitions are likely.

Core Business

  • Fulgent’s main business should earn $115 million in 2021, up 215 percent year-over-year, with an 80% gross margin and 60% operating profit.

Acquisition of CSI

  • CSI Labs gives the organization access to new geographies and 400 tests.

Conclusion

  • Any price volatility due to COVID-related revenue declines is anticipated to be short-lived, given the company’s core business is positioned for growth.