Is Senseonics (SENS) a Good Penny Stock To Buy?
Senseonics stock has tumbled over the last month. What’s the forecast for SENS stock? Is it a good penny stock to buy for 2022?
Dec. 21 2021, Published 9:21 a.m. ET
Dec. 2021 hasn’t been good for meme or penny stocks, with many tumbling. One included Senseonics, which, despite its fall, is still up for the year. What’s the forecast for SENS stock? Is it a good penny stock to buy for 2022?
SENS stock trades at less than half of its 52-week high. We see something similar in stocks that were once popular on Reddit group WallStreetBets. As the Reddit mania fizzled, meme stocks crashed, including AMC Entertainment and GameStop.
Senseonics isn't a meme stock
Senseonics isn't a meme stock, at least for now. The healthcare company produces an implantable CGM (continuous glucose monitoring) system, Eversense. The system, which could revolutionize the diabetic care market, has to be implanted by a healthcare professional every 90 days.
The FDA is reviewing Senseonics’ application for a 180-day implant
The FDA is reviewing Senseonics’ application to increase the implantable life of Eversense to 180 days. The review has been long pending and the delay has been frustrating for SENS investors. However, if the FDA grants the approval, Eversense's adoption could increase, as the need to visit a healthcare professional would be halved to only twice a year.
SENS stock's forecast looks positive for 2022
The 2022 forecast for SENS stock looks positive. SENS has taken several measures to increase the adoption of Eversense, outsourcing sales and commercialization efforts to Ascensia. The company generated revenue of $3.5 million in Q3 2021, and expects its 2021 revenue to be toward the middle of its previous guidance of $12 million–$15 million.
Senseonics’ sales could rise if the FDA grants approval to extend the implantable life of its device to 180 days. SENS, a cash-rich company, had $201.1 million in cash and cash equivalents on its balance sheet at the end of Sept. 2021. That figure was higher than its outstanding debt.
Penny stocks are a risky investment
Penny stocks are risky, as demonstrated by their volatility in 2021. Amid broader market sell-offs, penny and small-cap stocks have been among the worst performers. The market volatility looks set to continue for the next few months until we get more clarity on COVID-19's omicron variant.
Grand View Research expects the CGM market to grow 12.7 percent compounded annually between 2020 and 2027 to reach $10.4 billion. That target market looks massive considering Senseonics’ current market cap of $1.16 billion.
SENS looks like a good penny stock to buy for risk-tolerant investors. The stock could appreciate multifold if the Eversense CGM can achieve scale. The company's product addresses a real need—now it just needs to be commercialized. The FDA approval might just be the catalyst that Senseonics needs. If you're looking to buy a penny stock for 2022, SENS is one you should be watching.