Home Merchant cash advance Senseonics stock will likely rise on same trajectory as DexCom

Senseonics stock will likely rise on same trajectory as DexCom


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Senseonics (NYSEAMERICAN:SENSE) is a nascent continuous glucose monitoring (CGM) company that will likely follow a similar trajectory as DexCom (NASDAQ:DXCM). As such, the SENS action should increase quite quickly.

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DexCom is a much larger company whose shares have risen more than 21 times over the past 10 years. It brought its CGM products to market in successive iterations during this period. As a result, the stock of SENS is expected to increase 5-10 times over the next five years, assuming it receives Food and Drug Administration (FDA) approval for its CGM devices.

Liquidity fears allayed

However, over the past month and a half, the SENS share has fallen like a rock. It went from a high of $ 5.27 on February 16 to around $ 2.60 today, April 5. This is a steep drop of 50% that gives the impression that there is a problem with the business.

But this is not the case. Senseonics recently released its results on March 4, indicating that the company now had $ 187.3 million in cash on its balance sheet as of January 31. This is an increase from $ 18.2 million at the end of 2020.

Liquidity has increased following equity financings concluded in the first quarter of 2021. Here is what President and CEO Tim Goodnow said on the earnings call about the company’s liquidity: “Existing cash and cash equivalents should be sufficient to fund the business by breaking even operations and commercial launch.

This concerns its 365-day sensor designed to be calibrated only once a week, called Eversense XL. The company is already in “collaboration” with a Swiss company, Ascensia, by marketing its 90-day and 180-day sensors throughout Europe.

Last year, Senseonics spent about $ 65.5 million in negative free cash flow, according to its statement of cash flows on page 90 of its recent 10-K filing. This implies that with $ 187 million, Senseonics now has the money to last at least several years.

In fact, analysts seem to believe the FDA will be reviewing its newest product, Eversense XL, by early fall. However, its marketing already seems to be on track in Europe as Senseonics uses Ascensia in Europe to market its products.

What this means for Senseonics

Therefore, investors can expect to see SENS stock rise as the company moves through these sets of catalysts. In addition, doctors are more free to program surgical implants from its diabetes monitors. This will allow Senseonics revenue to flow out of the hole it is in.

Last year, the company generated just $ 4.85 million in sales, up from $ 21.3 million in 2019. But now analysts polled by Seeking Alpha expect sales to more than double. to reach $ 12.85 million in 2021. But by 2022, revenue is expected to grow by more than 6 times to $ 32.90 million.

At a market cap of $ 974 million, SENS stock is trading for 30 times a multiple of futures earnings. But consider this. One of its main competitors, DexCom now has a market cap of $ 35 billion and is trading 15 times the 2021 sales forecast of $ 2.81 billion.

Also, as I pointed out above, this stock has increased over 21 times over the past 10 years, including 4.4 times over the past 5 years. DexCom, like Senseonics, also has a cloud-based diabetes monitoring sensor product. This eliminates the need for the recipient to use lancers to prick their fingers while monitoring their blood sugar.

What to do with SENS Stock

The average analyst either has a grip on the stock, according to TipRanks.com and at Yahoo Finance. Or they have an average price target of $ 1.69, according to Marketbeat. However, I suspect these ratings predate the company’s recent earnings release, where they announced their increase in liquidity.

If you look at how far DexCom has come in its history over the past 5-10 years, you can see that the market will heat up towards Senseonics. Look to capitalize on the recent decline in SENS stock for its potential long-term trajectory.

As of the publication date, Mark R. Hake does not hold a long or short position in any of the stocks mentioned in this article.

Mark Hake writes about personal finance on mrhake.medium.com and run the Total Value of Return Guide which you can consult here.

The Senseonics Stock post will likely rise on the same trajectory that DexCom first appeared on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.