Biocept, Inc. reports financial results for the quarter ended June 30, 2017.
- Summary numbers: Revenues of USD 1.28 million, Net Earnings of USD -5.69 million.
- Gross margins widened from -151.87% to -85.21% compared to the same period last year, operating (EBITDA) margins now -419.62% from -671.60%.
- Change in operating cash flow of -20.10% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
- Earnings decline largely a result of non-operational activity, pretax margins improved from -693.01% to -444.97%.
The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:
|Relevant Numbers (Quarterly)|
|Revenue Growth (%YOY)||92.95||660.3||491.7||535.27||763.46|
|Earnings Growth (%YOY)||-23.92||9.08||9.33||-5.49||-13.86|
|Net Margin (%)||-445.14||-263.37||-324.17||-452.89||-693.08|
|Return on Equity (%)||-64.11||-80.04||N/A||N/A||N/A|
|Return on Assets (%)||-139.77||-139||-308.4||-395.85||-280.9|
Access our Ratings and Scores for Biocept, Inc.
Market Share Versus Profits
Compared to the same period last year, BIOC-US’s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if BIOC-US’s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by -24.01% and earnings by -28.44% compared to the previous period.
Earnings Growth Analysis
The company’s year-on-year earnings decline did not come as a result of a contraction in gross margins or because of any cost control issues. Both gross margins and operating margins (EBITDA) margins actually improved over this time frame. Gross margins went from -151.87% to -85.21%, while operating margins improved from -671.60% to -419.62% over this period. For comparison, gross margins were -26.52% and EBITDA margins -253.85% in the immediate last period.
Gross Margin Trend
Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.
BIOC-US’s gross margin improvement has not produced any big difference in its working capital. Working capital days are currently 599.04, compared to last year’s level of 211.14 days. This leads Capital Cube to conclude that the improvements in gross margins are likely from operating decisions and not trade-offs with the balance sheet.
Cash Versus Earnings – Sustainable Performance?
It is important to examine a companyï¿½s cash versus earnings numbers to gauge whether its performance is sustainable.
BIOC-US’s year-on-year change in operating cash flow of -20.10% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.
The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from -683.76% to -428.21% and pretax margins widened from -693.01% to -444.97%.
Access our Ratings and Scores for Biocept, Inc.
Biocept, Inc. is an oncology laboratory service company, which focuses on the development and marketing of novel laboratory products in the detection of rare cells to include circulating tumor cells. It develops and commercializes proprietary circulating tumor cell and circulating tumor DNA tests utilizing a standard blood sample. The company utilizes cell enrichment and extraction technology for the detection and analysis of circulating tumor DNA tests. It also offers services to other laboratory testing providers, academic institutions, research organizations, biopharmaceutical companies and clinical trial support. Biocept was founded on May 12, 1997 and is headquartered in San Diego, CA.
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