Pressure BioSciences Inc (OTC:PBIO) has received an upbeat write-up from Zacks smallcap research, which it reckons is more like a development stage biotech and targets US$10 each for the shares (current price: US$4.20).
The group operates in the "rather large, but underserved" research services market, says Zacks.
It has developed a "unique and superior pressure" cycling technology (PCT) to prepare biological laboratory samples.
The research group said sales had not been stellar so far, but this was "understandable".
PCT quite a new technology
"Pressure cycling technology is quite new to most customers in the sample preparation market, and the costs for PCT are also higher than those for most existing technologies. Therefore, rollout of the PCT platform will take time."
Earlier this month, Pressure said it was moving firmly towards profitability as it unveiled record revenues for the third quarter.
It reckons this revenues growth will not only continue in the fourth quarter and beyond, but accelerate to a greater rate as new sales team begins to meet with existing and potential customers throughout the US.
Total revenue in the third quarter was up 21% to US$646,061 from US$535,334 in the same period last year, which was a new record for any quarter.
Products and services revenue increased 21% to US$603,726, a new quarterly record, while consumable sales increased 158% to US$84,594, again a new quarterly record.
Grant revenue increased 23% to US$42,335 in the quarter, versus 34,385 in the third quarter last year.
So far, and significantly, fourth quarter purchase orders and purchase indications (90% estimated probability of closing) through to early November have already exceeded products and services revenue for the full 2016 fourth quarter, Pressure also noted.
Poised to boost top and bottom line..?
In its note, Zacks said: "With a rapidly growing market worldwide, combined with its unique technology and broad range of product offering, the company is well positioned to boost its top line and bottom line in the coming years.
"According to our long term financial model, the company's products and services revenue will grow at a compound annual growth rate (CAGR) of 79% in the next four fiscal years from 2017 to 2020."
Pressure Biosciences will become profitable in fiscal 2019 with an EPS of $0.01, it adds.
Achieving the CE marking for the Barocycler 2320EXT in February was an important next step in the company' s commercialization plans for this powerful and enabling sample preparation instrument, highlights Zacks.
"The company recently signed agreements with several strong distribution partners in Europe, the SCIEX co-marketing agreement is entering its second year (SCIEX is a global provider of laboratory instrumentation to the life sciences area, with a large presence in Europe."
And now with a significantly expanded sales capabilities, as well as the newly established multinational co-marketing partner SCIEX, Zacks reckons revenue will grow significantly in the fourth quarter and beyond.
Our price target values the company at $11 million in market cap.
"This valuation is still very conservative in our view. As long as the company can execute on its growth strategy correctly, we believe this goal is achievable. Patient investors will get rewarded."
Shares eased 1.18% to US$4.20 on Tuesday.