23andme Holding Stock Fair Value Calculation – 23andMe: Revenue Growth and Secular Trend, But Profitability Remains Elusive
June 25, 2023
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23ANDME HOLDING ($NASDAQ:ME) is a company that provides genetic testing services, which has seen major success in recent years due to a secular trend in the health and wellness industry. Analysts recommend investors remain on the sidelines when it comes to 23ANDME HOLDING, making it a Hold. Despite the potential long-term benefits, the risk of investing in a company that has yet to turn a profit is too great. The company’s services, which include genetic testing, are growing in popularity as consumers become more interested in understanding their genetic makeup. This trend has been beneficial for 23ANDME HOLDING as its user base expands, but the company needs more time to figure out how to convert sales into profits.
The company’s main goal is to eventually turn a profit by reducing costs and increasing efficiency. In the meantime, 23ANDME HOLDING is also looking into expanding its product offerings and developing new potential revenue streams. Overall, 23ANDME HOLDING is benefiting from a secular trend and has seen revenue growth, however, its lack of profits makes it a risky investment at this time. Investors are advised to remain a Hold until the company can prove its profitability.
Earnings
23ANDME HOLDING experienced revenue growth and a secular trend in its latest earning report of FY2023 Q4 ending March 31 2021. In this period, total revenue stood at 88.58M USD, 11.9% lower than the same period last year. Nevertheless, total revenue has increased from 88.58M USD to 92.38M USD in the past three years.
Despite this revenue growth, profitability still remains elusive as the company reported a net income loss of 67.01M USD. This indicates that 23ANDME HOLDING must further develop its operations in order to become profitable in the future.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for 23andme Holding. More…
| Total Revenues | Net Income | Net Margin |
| 299.49 | -311.66 | -104.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for 23andme Holding. More…
| Operations | Investing | Financing |
| -165.39 | -11.3 | 9.78 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for 23andme Holding. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 942.6 | 228.66 | 1.55 |
Key Ratios Snapshot
Some of the financial key ratios for 23andme Holding are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -0.7% | – | -108.2% |
| FCF Margin | ROE | ROA |
| -59.0% | -27.6% | -21.5% |
Stock Price
23ANDME HOLDING, an American personal genomics and biotechnology company, saw its stock rise 1.6% on Thursday, with shares opening at $1.8 and closing at $1.9. This was attributed to the company’s continuously growing revenue, which has been steadily increasing year over year.
However, despite their growth, the company has yet to turn a profit and remains untested in terms of profitability. The company is currently transitioning from a consumer genetics business to a health care platform, with the aim of bringing precision medicine to the consumer level. If successful, 23ANDME HOLDING could become a leader in the biotechnology sector. However, they will need to find a way to become profitable in order to remain competitive and ensure a successful future for the company. Live Quote…
Analysis – 23andme Holding Stock Fair Value Calculation
At GoodWhale, we conducted an extensive analysis of 23ANDME HOLDING‘s fundamentals to generate our proprietary Valuation Line. This line indicated that the fair value of 23ANDME HOLDING share is estimated to be around $4.6. However, the current price of 23ANDME HOLDING is just $1.9, which is 58.4% lower than its fair value. This suggests that 23ANDME HOLDING stock is undervalued and could offer great potential for investors. More…
Peers
The company offers a range of tests, including those for ancestry, health, and wellness. Its competitors include IQVIA Holdings Inc, Illumina Inc, and Avricore Health Inc.
– IQVIA Holdings Inc ($NYSE:IQV)
In 2022, IQVIA Holdings Inc had a market capitalization of $40.44 billion and a return on equity of 21.52%. The company provides data, information and technology solutions that help customers drive healthcare insights and solutions.
– Illumina Inc ($NASDAQ:ILMN)
Illumina Inc has a market cap of 34.93B as of 2022, a Return on Equity of -29.49%. The company is a provider of sequencing and array-based solutions for genetic analysis. The company’s products are used by researchers, physicians, patients and parents to make better decisions about health, agriculture, pharmaceuticals, research and many other areas.
– Avricore Health Inc ($TSXV:AVCR)
Avricore Health Inc is a Canadian biotechnology company that develops and commercializes products for the early detection and prevention of chronic disease. The company has a market cap of 25.4 million as of 2022 and a return on equity of -46.21%. Avricore’s products are based on its proprietary technology, which uses a combination of blood tests and genetic tests to identify individuals at risk for developing chronic diseases such as heart disease, stroke, and cancer.
Summary
23ANDME Holding is a genetic testing company currently trading on the stock market. Investment analysis of the company holds that it has experienced strong growth in its revenue over the past few years, which is a positive secular trend. However, the company is yet to report profits, making it a hold, rather than a buy, for investors. It is important to note that the company faces strong competition in the DNA testing market, and its long-term profitability will be determined by its ability to maintain its market share.
