BillionToOne, Inc. (NASDAQ:BLLN) is one of the stocks Jim Cramer expressed his thoughts on. Cramer noted that he is a “big fan” of the industry the company is a part of, as he stated:
“Where do I come down on this thing? Honestly, I really like it. BillionToOne is playing in an industry that I’m a big fan of, diagnostics, and it has a fantastic story within that space, which feels like it’s still in the early innings. I wish Danaher would buy them. That’s a Charitable Trust name that’s just languished here. Their growth is excellent and even possibly accelerating. At the same time, they’ve just started turning a profit. Look to get even more profitable going forward.
Still, how much do we pay for it? Well, the stock came public at 60 bucks. It’s now at $90, where it’s valued at… roughly $4 billion depending on your estimates for this year’s revenue. That means BillionToOne’s trading… between 10 to 15 times this year’s sales estimate. Okay, pretty rich, but given the sky-high growth rate and the newfound profitability, you know, I don’t think it’s all that unreasonable. Frankly, if you like this story, you got my blessing to put on a small position right here on Monday. That said, we’re in a pretty precarious moment for high-risk stocks as evidenced by the more than $30 pullback that BillionToOne’s already experienced from its first day’s highs. If this volatility continues, I think the stock will come down even more. But you know what? This is the kind of stock that gets cheaper as it goes lower, so I’d be thrilled to see it come down. That just means you can get a better buy price.
All that said, this BillionToOne IPO is what we call a sliver deal. They sold 4.55 million shares, which is only about 10% of the total share count. That’s near-term positive because it artificially depresses the amount of supply. But after that lockup on insider selling expires in May, you’re going to have to expect that there’s a chance this thing could really sell off hard. Here’s the bottom line: I am a big fan of BillionToOne and I love what they’re trying to do, but I think you gotta expect some turbulence in the share price, and that’s why I’m recommending putting a small position here on Monday and then gradually buying more into any weakness. If that doesn’t happen any soon, I think you’re going to get your chance when the lockup expires in six months. Be patient with this one. If you take your time, I’ll bet you get a great entry point. Memo to Danaher: take a look at these guys.”
Photo by Yiorgos Ntrahas on Unsplash
BillionToOne, Inc. (NASDAQ:BLLN) develops precision molecular diagnostics using a platform that counts DNA molecules to improve disease detection. The company’s tests include non-invasive prenatal screening and liquid biopsies for detecting and monitoring cancer mutations.
While we acknowledge the risk and potential of BLLN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BLLN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center