Precipio Biotech
Source: Precipio Facebook

Is Precipio (PRPO) a Good Stock to Buy? A Look at the Year Ahead

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May. 4 2021, Published 10:20 a.m. ET

Precipio (PRPO) stock rose 172 percent on May 3. The stock skyrocketed after the company announced the launch of COVID-19 antibody test on Amazon’s website. What’s the forecast for PRPO stock in 2021? Will it rise more, or should you stay away from the penny stock?

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Precipio, a biotechnology company, serves customers in the U.S. The company focuses on diagnostics in neurology, cardiology, oncology, and inherited diseases. Precipio also offers specialized clinical and research services to other biotech companies building targeted therapies.

Precipio’s COVID-19 antibody test launches on Amazon

On May 3, Precipio announced the launch of its rapid COVID-19 antibody test on Amazon’s business platform. The tests are made by California-based Nirmidas Biotech, and can generate results in as little as 20 minutes. The main aim of this test is to detect antibodies that have been formed after the person was exposed to COVID-19 or was vaccinated. The test doesn’t need any lab equipment.

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is it too late to buy precipio prpo stock
Source: Precipio Facebook

The product is available for purchase on Amazon, but it may currently be bought by only qualified point-of-care providers. This was the first point-of-care test in the U.S. to be granted permission for emergency use by the FDA. In Apr. 2021, the FDA issued emergency use authorization to coronavirus tests developed by Abbott Laboratories and Quidel.

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What happened to Precipio stock?

Precipio stock gained 172 percent on May 3, and was up in premarket trading on May 4. The stock is up 139 percent year-to-date and has risen 643 percent over the last year.

is it too late to buy precipio prpo stock
Source: Koyfin

PRPO Stock Price

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Precipio’s stock forecast and Reddit discussion

According to MarketBeat, Precipio stock is being tracked by just one Wall Street analyst. Maxim analyst Jason McCarthy raised his target price on Precipio stock to $7 from $2 and maintained a "buy" rating. The target price implies a 41 percent upside.

In a research note, McCarthy wrote that Precipio’s 2020 sales grew despite COVID-19 headwinds. That increase was mostly due to the pathology services segment. Precipio is transitioning toward higher-margin hematology diagnostic products and away from sample collection and in-house research. A Reddit user suggested buying Precipio stock as soon as it breaks the volume-weighted average price.

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Is Precipio stock a good investment?

Precipio generated net sales of $6.1 million in 2020, which represents a 95 percent rise from 2019. Analysts polled by TIKR expect the company’s revenue to rise 122 and 45 percent, respectively, in 2021 and 2022. Precipio stock looks like a good investment based on its growth outlook. The company is set to benefit as it expands into additional sales channels.

Should you buy Precipio stock?

Precipio's next-12-month EV-to-sales multiple is 6.5x, which looks attractive compared with that of other biotech stocks. Illumina and Agilent Technologies have multiples of 13.1x and 7.0x, respectively. Precipio stock is trading above its 50-day and 200-day moving averages, suggesting that investor sentiment is turning bullish. 

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