GenMark Diagnostics, Inc (NASDAQ:GNMK)
GenMark Diagnostics, Inc (NASDAQ:GNMK) shares shed over 40% of their value in Friday’s trading session after the company reported a (-$15.4) million loss, or (-$0.28) per share, for Q3 2017. Those results were in line with analyst expectations but revenues, $11.6 million, were 18% lower than what the street was expecting. GNMK shares ended the day at $4.26 on heavy volume. A stock that normally trades under 400,000 shares per day traded over seven million shares by Friday’s end of trading.
Shares of GenMark Diagnostics, Inc (NASDAQ:GNMK) experienced similar price action when they released their Q2 earnings results this past summer. The market responded to those losses by selling off the stock to the tune of 15%. At the time, shares were trading around the $10 handle. Since then, shares steadily slid to $8 before they gapped down over 40% on Thursday’s earning’s announcement.
Carlsbad, CA-based GenMark Diagnostics, Inc (NASDAQ:GNMK) is a provider of automated, multiplex molecular diagnostic testing systems that detect and measure DNA and RNA targets to diagnose disease and assist healthcare providers in determining the most efficient patient treatment. GenMark’s proprietary eSensor XT-8® system is designed to support a broad range of molecular diagnostic tests with a workstation and self-contained, disposable test cartridges.
A frequent characteristic of biotech shares that dramatically underperform is the continual issuance of new shares which leads to a dilution of shareholder equity. In Genmark’s case that dilution has not been a major concern. In 2014, there were 41.35 million GNM shares outstanding. That number increased to just 44.1 million by the end of 2016. Even sales are trending upwards. For 2012, the company reported $20.5 million in sales. By 2016 that number was a robust $49.3 million.
However, GenMark Diagnostics, Inc (NASDAQ:GNMK) management has been unable to translate increasing sales into shareholder profits. Per share, the company lost (-$0.84) in 2012. That figure was followed by annual per share losses of (-$0.95), (-$0.93), (-$1.00), and, for 2016, (-$1.15). Year-to-date GNMK shares are down over 65% and have lost over 55% in the last month. That share performance is reflected in the stock’s Relative Strength Index (RSI) score of 9.7. Most observers believe that an RSI below 20 is signaling an “Oversold” condition.
Many sector observers believe that the share drop will force the Board of Directors for GenMark Diagnostics, Inc (NASDAQ:GNMK) to investigate a licensing agreement, merger, or sale in an effort to generate shareholder value.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.