BTIG starts Sophia Genetics at buy; PT $6

BTIG initiated coverage of Sophia Genetics (NASDAQ:SOPH) with a “buy” rating and $6 price target. The stock price closed at $2.06 on Dec. 30.

Sophia is a rapidly growing, global healthcare technology company that sells its proprietary software to hospitals, labs and pharma companies to deliver analytics and improved insights in areas like genomics, imaging and other -omics categories to come, writes analyst Mark Massaro.

“We are impressed by Sophia’s strong financial profile, with the company having 90%-plus recurring revenue and targeting plus-30% to 35% year-over-year topline compound annual growth rate (FXN) and 70%-plus gross margins by 2025,” Mr. Massaro said.

While most of its revenue is in Europe currently, Sophia expects to make further inroads into the U.S. market, and “we see significant upside potential for a stock that in our view is disconnected from its fundamentals,” he added.

“We believe Sophia shares are undervalued as the stock trades at a negative enterprise value, and two turns below its peers,” Mr. Massaro said.