Biocept’s PCR Testing Remains a Key Piece of the COVID-19 Puzzle; Analyst Says ‘Buy’

Biocept’s PCR Testing Remains a Key Piece of the COVID-19 Puzzle; Analyst Says ‘Buy’As the final quarter of 2020 approaches, so does the 2020/2021 flu season. As a result, the demand for COVID-19 testing is only expected to intensify, with those providing solutions set to be rewarded handsomely, according to Wall Street pros.Biocept (BIOC) is among those fighting the good fight against the deadly virus, offering polymerase chain reaction (PCR) tests. These tests are used to directly detect the presence of an antigen, rather than the presence of the body's immune response, or antibodies.On September 16, BIOC announced that it has received more than 35,000 COVID-19 specimens to-date, reflecting a roughly 14,000 increase since the last update on August 31.Weighing in on the development for Maxim is 5-star analyst Jason McCarthy. The analyst argues that given the reimbursement of $100 per test, “Biocept's revenue growth in Q3 2020 should continue and that's assuming the core oncology testing services business is still lagging from COVID impacts.”Expounding on the opportunity, the analyst said, “The company also is positioned to continue to capitalize on the current COVID-19 testing paradigm, with 83,000 specimen collection kits assembled to date, and inventory for an additional 87,000. The inventory on hand is particularly important as we head into the 2020/2021 cold/flu season, where we anticipate testing could play a significant role in managing emerging COVID hotspots and existing hotspots with active infections.”It should be noted that shares have pulled back since early August, but McCarthy points out that its peers in the PCR and testing space have also experienced pullbacks. “This, in our view was in part due to profit taking given valuations this summer, but also from Abbot's rapid antigen test receiving an EUA on 8/27. While antigen tests can expand testing with 'rapid' results in minutes, they do come at a cost in sensitivity and specificity which is why FDA for rapid influenza tests sets the bar at only 80%,” he explained.As PCR tests boast nearly 100% accuracy, McCarthy believes COVID-19 testing is “here to stay.” He added, “With schools now open (depending on where you are) and businesses trying to open, testing remains a key component… Interestingly, as of early September, we are starting to see valuations in the space rebound and expect that this trend should continue, particularly for Biocept.”Additionally, McCarthy cites another key growth driver, namely oncology testing. “Oncology testing slowed in 1H20 as patients stopped going to doctors during the pandemic. They still have cancer and still need to get their testing done, which should start to pick up revenue for Biocept once again as the company heads towards end of year,” he mentioned.In line with his optimistic approach, McCarthy sides with the bulls, maintaining a Buy rating. At $20, his price target brings the upside potential to 345%. (To watch McCarthy’s track record, click here)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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