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The Ultimate Reason … Why ONVO Will Be Trading < $4 …. By February 2015

|Includes:Organovo Holdings, Inc. (ONVO)

Finally analysts (actually 1) have started (Feb 2014) to quantify their Expectation about Organovo future revenue! Within the next 9-11 month we should finally be able to determine whether or not the Expectations surrounding ONVO are legit! No more Excuses.

In my previous posts (1,2,3, 4), I have outlined the reasons why I do believe ONVO will fail to succeed / generate any substantial revenue.

As soon as investors (especially Retail Investors) start to realize ONVO will not be able to meet investors'/analysts' expectations ... the bubble will start to pop.

I do expect this scenario to materialize no later than 2014Q2 results' release (November 2014) … with escalating selling activity once 2014Q3 10Q is filed (Beginning of February 2015).

Click to enlarge

Organovo is expected to generate $15.7m in revenue for FY2014 (Ending March 31, 2015) and $33.4m in FY2015 (Ending March 31, 2016)

Here a closer Overview:

ONVO Investors should really be concerned with analyst estimate for FY2015 Revenue Growth of only 112%. You would expect such a promising company to have a higher revenue growth rate at the beginning of its revenue generating era… especially when the $mm amount is in the low 10s of $mm … and the technology is so "promising".

The FY2015 revenue forecast … can help us … estimate in which Q of 2014 … we should start to see some significant revenue.

If we assume a Q over Q Revenue Growth of 15% during FY2015 … if follows that 2015Q1 revenue should be approx. $6.7m.

It is highly unlikely that any of the 2014Qs will show a revenue higher than the 2015Q1 figure (given the ramping up in Revenue) … In the best Case scenario therefore this is what we could expect for FY2014 …

Or … more realistically… assuming a 15% growth rate starting after 2014Q2:

Soon we will have the verdict.

A read below 3$m for 2014Q2 revenue would be a huge red flag IMO …

… while a read below $8m for 2014Q2&3 total revenue will definitely put an end to the …. Wannabe ONVO billionaire dreams!

Were ONVO TO meet analysts' expectations?! … I would not buy … since at these prices it would still be overvalued. In that case … however … I do think … the bubble could persist for some additional time.

Disclosure: I am short ONVO.

Stocks: ONVO