Fulgent Genetics (FLGT)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

We have some comments posted on FLGT. While it is not without potential, it is likely going to get worse before it bets better, growth-wise. The most recent quarterly earnings were fine as revenue continued to decline, but beat estimates, along with EPS. There are positives as the pharma side of the business is making progress with over 30 issued or active patents and a promising lead drug candidate. The balance sheet does continue to be strong. We are OK selling. 
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They do genetic testing for rare diseases and other applications. They rolled out many tests during Covid, which became their major source of revenue (88%). Flush with that cash, they bought a company in August 2021, a good long-term opportunity in cancer testing. They didn't rest on their laurels. However, the market sees Fulgent as a Covid stock and has dumped it. Analysts expect their earnings to vanish in 2023. Do you believe in the rest of their business to have faith in it. He doesn't see much downside, but there's nothing urgent here to make him buy. He wants to see their Q4 numbers before making a movie. They have net cash of $900 million.