Zacks Small-Cap Research (Zacks SCR) has raised its target price for BioStem Technologies, a developer of perinatal tissue-based therapies, believing the stock should trade at double its current market price. This comes after the company’s third-quarter financial results, which beat Wall Street expectations.
Details
Zacks SCR values BioStem Technologies stock at $32.50 per share, about two times the last closing price of $12.70 per share on Tuesday, November 19.
The company’s third-quarter earnings report was strong. Net revenue soared 2,259% year over year in the quarter to $82.6 million, beating forecasts, according to Zacks SCR. Net income surged 543% to $6.8 million, versus a loss reported in the previous-year period.
On the day BioStem released its earnings, November 12, its stock hit a record high of $24.98 per share before giving up those gains. Zacks SCR attributes the reversal to BioStem’s failure to secure coverage by the U.S. federal Medicare insurance program, despite efforts that began earlier this year. This “seems to have been perceived as a fundamental change in the company,” Zacks SCR wrote; however, it disagrees and has maintained its now-increased target price, citing two reasons: the new administration in the U.S. and the company’s plan to submit an application for reconsideration regarding Medicare coverage.
About the сompany
Since its founding in 2014, BioStem Technologies has been developing and making regenerative medicine using placental tissues. Applications include covering soft tissue wounds and repairing ocular surfaces. The company was founded by Jason Matuszewski, a mechanic for the Mazda Factory Race Team; Andrew Van Vurst, a former U.S. Marine; and his father, Chip Van Vurst, a professional race car driver and two-time brain tumor survivor. After traditional treatments caused side effects, the father-and-son duo explored alternative options, leading to the creation of BioStem.
BioStem currently sells several perinatal tissue-based products. Last year, the company signed multiple partnerships for commercialization nationwide. In 2024, it received Institutional Review Board approval to clinically study its AmnioWrap2 therapy on diabetic foot ulcers.
