Maravai LifeSciences: Still Struggling To Find Its Footing

seekingalpha11-26

Today, we revisit life sciences concern Maravai LifeSciences Holdings, Inc. as the stock has seen its first insider buying in many years in November.The stock has had a rough go of it during the month...

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We concluded our last article on this life sciences concerns in January of this year with the following summary: More progress needs to be seen around stabilizing Maravai LifeSciences Holdings, Inc.'s core business and cost structure before the stock can be considered investable. The stock has drifted down some 20% since our last look at Maravai LifeSciences Holdings, Inc. ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"MRVI":"Maravai LifeSciences Holdings, Inc.","BK4121":"生命科学工具和服务"},"translate_title":"Maravai LifeSciences：仍在努力寻找立足点","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MRVI":0.9},"content_text":"Today, we revisit life sciences concern Maravai LifeSciences Holdings, Inc. as the stock has seen its first insider buying in many years in November.The stock has had a rough go of it during the month after the company lowered FY2024 sales guidance with its third quarter results earlier this month.Maravai was the subject of some takeover chatter in August, but nothing yet has come of those reports.An updated analysis around Maravai LifeSciences follows in the paragraphs below.Luis Alvarez  We are putting Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) in the spotlight today as Seeking Alpha follower asked for a new assessment. We concluded our last article on this life sciences concerns in January of this year with the following summary: More progress needs to be seen around stabilizing Maravai LifeSciences Holdings, Inc.'s core business and cost structure before the stock can be considered investable. The stock has drifted down some 20% since our last look at Maravai LifeSciences Holdings, Inc. Notably, the stock has seen the first insider buying in its shares in many years here in November. Has the situation changed and is the stock now investable? An updated analysis follows below. Seeking Alpha Maravai LifeSciences Holdings, Inc. is headquartered in San Diego, CA. This life sciences concern main focus is supplying a reliable supply of reagents in the fields of nucleic acid production and biologics safety testing. And this is how the company breaks down its sales (Nucleic Acid Production and Biologics Safety Testing) These are in turn used in developing new therapeutics, vaccines, in diagnostics and research. The stock currently trades around $5.25 a share and sports an approximate market capitalization of $1.3 billion. Recent Results: The company posted its Q3 numbers on November 7th. Maravai LifeSciences Holdings, Inc. delivered a non-GAAP loss of two cents a share in the quarter, a penny a share under the consensus. Taking out a substantial impairment charge (more on that below), the company had a net loss of $21.8 million for the quarter, compared with a net loss of $15.1 million in 3Q2023. 'Adjusted' EBITDA was a positive $12.7 million for the quarter, a slight improvement from $11.9 million in the same period a year ago. Revenues fell 2.5% on a year-over-year basis to $65.2 million, more than $2 million below expectations. Sales from both divisions fell 2.5% from the same period a year ago. Management noted lower demand from end customers for the fall in sales. Third Quarter Press Release Via Seeking Alpha For the first nine months of 2024, the revenue decline from its Nucleic Acid Production has been steeper. The company is acquiring the DNA and RNA business of Officinae Bio. This is a privately held technology company, and the purchase should bolster Maravai LifeSciences' capabilities in nucleic acid production. Third Quarter Press Release Via Seeking Alpha However, what caused the stock to plunge nearly 45% on the day of the earnings release was downwardly revised guidance as management now expects FY2024 revenues to be in a range of $255 million to $265 million. Guidance provided with the release of its second quarter numbers offered a range of $265 million to $285 million for comparison sakes. In addition, the company took a goodwill adjustment charge of $154.2 million during the quarter. That pushed the net loss for Maravai in the first nine months of FY2024 at just over $218 million, compared to just north of $28 million for the first nine months of FY2023. Analysts Commentary & Balance Sheet: The company has mixed views right now in the analyst community. Since third quarter results hit the wires, four analyst firms, including RBC Capital and Bank of America, have reissued Buy ratings on the stock. Price targets proffered range from $9 to $13 a share. Morgan Stanley ($7 price target), William Blair, Wolfe Research and Goldman Sachs ($7 price target) chose to maintain their Hold ratings on the equity. Approximately six percent of the outstanding float in the stock is currently held short. Two insiders did purchase nearly $1.1 million worth of shares collectively in the days following the posting of third quarter numbers. Notably, it was the first insider buying in the stock since 2020. Maravai LifeSciences Holdings, Inc. ended the third quarter with approximately $578 million of cash and marketable securities on its balance sheet against just over $515 million of long-term debt, according to the 10-Q filed for the quarter. Conclusion: Maravai LifeSciences Holdings, Inc. made three cents per share in profits (non-GAAP) in FY2023 on $289 million in revenue. The current analyst firm consensus has the company seeing eight cents a share of red ink in FY2024 as sales fall to just over $260 million. They project losses of six cents a share in FY2025 on three to four percent sales growth. Maravai LifeSciences was the subject of considerable takeover speculation in August of this year when it was reported Repligen (RGEN) made an offer to acquire Maravai. At the time, RBC Capital speculated the company could be worth $15 to $20 a share as a buyout target. Notably, nothing has come on this front since then. This, combined with the recent insider buying are really the only two significant positives to the investment case around the stock at the moment.  Maravai LifeSciences looks like it has at least a couple of years (FY2024 and FY2025) where it will endure losses. Sales guidance was ratcheted down with its last earnings report, and analyst firm support is 'tepid' at best. Maravai did make $1.80 a share on better than $880 million worth of sales in FY2022, but that huge year was almost entirely the result of the covid pandemic and is very unlikely to ever be repeated. Until the company can turn the corner to profitability, there still seems little recent to invest in the stock unless one believes a buyout comes back on the table. Therefore, the stock remains an 'avoid' in my opinion.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2486034470"}