OncoCyte: Between A Hammer And A Hard Place

Nov. 19, 2022 11:10 PM ETOncoCyte Corporation (OCX)
Bashar Issa profile picture
Bashar Issa
3.47K Followers

Summary

  • As the era of free money ends, molecular diagnostic companies, which historically relied on equity funding, find themselves strapped for cash.
  • OCX is in an unfavorable position compared to peers who have the necessary revenue base to pivot into profitability.
  • Unless OCX finds partners to develop its pipeline or commercialize DetermaRx, it will most likely tap into the equity market at suppressed levels, amplifying dilution.
  • This article upgrades OCX from Sell to Hold on improving valuation after the stock dropped 50% since our last rating.

A balloon flying too close to cactus

Richard Drury

Investment Thesis

In the previous article, we looked at OncoCyte' (NASDAQ:OCX) platform and compared its potential against structural risks, manifested in a weak balance sheet, intensifying competition, and low earnings visibility, and concluded that risks outweigh rewards, assigning its ticker

This article was written by

Bashar Issa profile picture
3.47K Followers
Bashar is a contributing writer at Seeking Alpha, focusing on Long/Short investment ideas, with a geographic focus in North America. Before that, Bashar worked at an Investment Fund in the United Kingdom. He has a Master's degree in Finance from the Queen Mary University of London and a Bachelor's degree in Economics from Middlesex University.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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