HBIO Stock Forecast: HBIO is overvalued and will correct

Today we are looking at Harvard Bioscience, Inc. (NASDAQ: HBIO), to determine if you should buy HBIO stock. We will look at HBIO financial ratios, analyst ratings, and current valuation to determine a HBIO forecast and price. What Does HBIO Do? Harvard Bioscience, Inc. develops, manufactures, and sells technologies, products, and services that enables fundamental research, discovery, and pre-clinical testing for drug development in the United States and internationally. The company offers cellular and molecular technology instruments, such as syringe and peristaltic pump products, as well as a range of instruments and accessories for tissue and organ-based lab research, including surgical products, infusion systems, and behavior research. HBIO Stock Analysis and Forecast Harvard Bioscience, Inc. Competition and Comparables In order to undergo a comparable analysis (to determine HBIO stocks value), we need to first outline who HBIO's competitors are. These competitors need to be publicly listed, have valid financial metrics/multiples, operate in a similar manner to HBIO, and have a market cap similar to HBIO (if possible). By keeping this in mind, I found the following list of companies to be some of HBIO stocks closest competitors: NMTR, CTXR, RDHL, EIGR, TLIS, CBAY, DRIO, LVTX, ALPN, BLU HBIO Stock News and Information Analysis of Harvard Bioscience, Inc. Stock Performance and Financial Ratios HBIO Earnings (Yearly): HBIO Revenues: In FY 2021, HBIO experienced a yearly decrease in revenues of $-69.05M (or -67.62%) resulting in a total revenue figure of $33.05M. HBIO Cost of Revenues: In FY 2021, HBIO experienced a yearly decrease in their cost of revenues of $-30.56M (-69.37%), resulting in a total cost of revenue figure of $13.49M. HBIO Gross Profit: In FY 2021, HBIO experienced a yearly decrease in their gross profit of $-38.48M (or -66.3%) resulting in a total gross profit of $19.56M. HBIO EBITDA: In FY 2021, HBIO experienced a yearly decrease in their EBITDA of $-4.42M (or -85.46%) resulting in a total EBITDA of $752k. This decrease (of -85.46%) stems from the fact that HBIO experienced a decrease in their gross profits of -66.3% (as we saw in the previous bullet point). HBIO Net Income: In FY 2021, HBIO experienced a yearly increase in their net income of $6,849,000 resulting in a total net income of $961k. Overall, HBIO Earnings were rather poor for 2021, however, what about HBIO Earnings on a more recent timeframe? Let's find out. HBIO Earnings (Quarterly): HBIO Revenues: In Q1 2022, HBIO experienced a quarterly decrease in revenues of $-4.28M (or -12.94%) resulting in a total revenue figure of $28.78M. HBIO Cost of Revenues: In Q1 2022, HBIO experienced a quarterly decrease in their cost of revenues of $-894k (-6.62%), resulting in a total revenue figure of $12.6M. Since the decrease (of -6.62%), in HBIO's cost of revenue was greater (by 6.31%) than the decrease (of -12.94%) in HBIO's revenues, we should expect that HBIO experienced an decrease in their Q1 gross profits. HBIO Gross Profit: In Q1 2022, HBIO experienced a quarterly decrease in their gross profit of $-3.38M (or -17.3%) resulting in a total gross profit of $16.18M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between Q1 2022 and Q4 2021. HBIO EBITDA: In Q1 2022, HBIO experienced a quarterly decrease in their EBITDA of $-5.54M (or -736.44%) resulting in a total EBITDA of $-4.79M. This decrease (of -736.44%) stems from the fact that HBIO experienced a decrease in their gross profits of -17.3% (as we saw in the previous bullet point). HBIO Net Income: In Q1 2022, HBIO experienced a quarterly decrease in their net income of $-7.84M (or -815.92%) resulting in a total net income of $-6.88M. HBIO EPS: As a result of HBIO's decrease in net income of $-7.84M, HBIO's EPS also decreased (by $-0.19) from $0.02 in Q4 2021 to $-0.17 in Q1 2022 Overall, it seems as though HBIO had a poor financial performance (due to EPS $-0.19) as many of their financial metrics shrunk, most notably their EPS (by $-0.19), as well as their net income (by $-7.84M), and other metrics (as you can tell from the above bullet points). Additionally , HBIO stock missed their EPS estimate by $-0.01(or -20%), as they reported an EPS of $0.04 for the quarter (compared to their estimated EPS of $0.05). Is HBIO Share Dilution an Issue? As part of their Q1 2022 earnings release, HBIO stated that they currently have 41.22M Shares Outstanding (weighted average), which is up 379k shares (from 40.84M shares outstanding in Q4 2021). This represents a dilution of around 1% which should be important to HBIO investors. Furthermore, HBIO stock has up to 2.53M of shares that they can issue (thereby diluting HBIO's stock). This maximum dilution for the period would only have a dilutionary effect on HBIO of 6%. This is a very sizeable amount of potential dilution, and should be cause for concern for HBIO investors. Latest HBIO Stock Analyst Ratings Here is the current analyst rating distribution for HBIO. In total there are 5 HBIO stock analyst ratings. 5 Buys 0 Holds 0 Sells Analyst Ratings have provided relatively strong indicators of future price movement, which is why they are used to determine if HBIO stock is a buy or sell HBIO Stock Price Forecast HBIO Price Forecast Using Comparable Analysis Price to Book (P/B): HBIO's current P/B ratio is 2.02, compared to the average P/B ratio of HBIO's peers being 2.4. This implies that HBIO is undervalued and their share price should change by a factor of 18.68% to be at fair value (based on HBIO's P/B compared to the P/B of their peers). Price to Equity (P/E): HBIO stock P/E ratio is currently -23.78, compared to the average P/E ratio of HBIO's peers being -2.4. This implies that HBIO is overvalued and their share price should change by a factor of -89.91% to be at fair value (based on HBIO's P/E compared to the P/E of their peers). Overall, HBIO stock is overvalued and needs to experience a change in stock price of (an average of) -35.61% to be considered “at fair value”. Is HBIO Stock a Buy or Sell? Overall, due to the fact that HBIO has done particualrly poorly on their most recent yearly and quarterly earnings, as well as the fact that the HBIO Price Forecast (via a comparable analysis of P/E and P/B) found that HBIO was overvalued and need to experience a price change of -35.61% in order to be at their fair value, I have concluded the following: HBIO is most likely overvalued, and their financials are not strong. As a result, I would consider taking a bearish position (if any) in the HBIO stock. I would look for a decrease of 15-20% before considering exiting this position.

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HBIO Stock Forecast: HBIO is overvalued and will correct

Jun 7, 2022

bearish

general Analysis

[5 min Read]

blog post cover photo

Photo by: RephiLe water

Today we are looking at Harvard Bioscience, Inc. (NASDAQ: HBIO), to determine if you should buy HBIO stock. We will look at HBIO financial ratios, analyst ratings, and current valuation to determine a HBIO forecast and price.

What Does HBIO Do?

Harvard Bioscience, Inc. develops, manufactures, and sells technologies, products, and services that enables fundamental research, discovery, and pre-clinical testing for drug development in the United States and internationally. The company offers cellular and molecular technology instruments, such as syringe and peristaltic pump products, as well as a range of instruments and accessories for tissue and organ-based lab research, including surgical products, infusion systems, and behavior research.

HBIO Stock Analysis and Forecast

Harvard Bioscience, Inc. Competition and Comparables

In order to undergo a comparable analysis (to determine HBIO stocks value), we need to first outline who HBIO's competitors are.

These competitors need to be publicly listed, have valid financial metrics/multiples, operate in a similar manner to HBIO, and have a market cap similar to HBIO (if possible).

By keeping this in mind, I found the following list of companies to be some of HBIO stocks closest competitors:

NMTR, CTXR, RDHL, EIGR, TLIS, CBAY, DRIO, LVTX, ALPN, BLU

HBIO Stock News and Information

Analysis of Harvard Bioscience, Inc. Stock Performance and Financial Ratios

HBIO Earnings (Yearly):

  • HBIO Revenues: In FY 2021, HBIO experienced a yearly decrease in revenues of $-69.05M (or -67.62%) resulting in a total revenue figure of $33.05M.
  • HBIO Cost of Revenues: In FY 2021, HBIO experienced a yearly decrease in their cost of revenues of $-30.56M (-69.37%), resulting in a total cost of revenue figure of $13.49M.
  • HBIO Gross Profit: In FY 2021, HBIO experienced a yearly decrease in their gross profit of $-38.48M (or -66.3%) resulting in a total gross profit of $19.56M.
  • HBIO EBITDA: In FY 2021, HBIO experienced a yearly decrease in their EBITDA of $-4.42M (or -85.46%) resulting in a total EBITDA of $752k. This decrease (of -85.46%) stems from the fact that HBIO experienced a decrease in their gross profits of -66.3% (as we saw in the previous bullet point).
  • HBIO Net Income: In FY 2021, HBIO experienced a yearly increase in their net income of $6,849,000 resulting in a total net income of $961k.

Overall, HBIO Earnings were rather poor for 2021, however, what about HBIO Earnings on a more recent timeframe? Let's find out.

HBIO Earnings (Quarterly):

  • HBIO Revenues: In Q1 2022, HBIO experienced a quarterly decrease in revenues of $-4.28M (or -12.94%) resulting in a total revenue figure of $28.78M.
  • HBIO Cost of Revenues: In Q1 2022, HBIO experienced a quarterly decrease in their cost of revenues of $-894k (-6.62%), resulting in a total revenue figure of $12.6M. Since the decrease (of -6.62%), in HBIO's cost of revenue was greater (by 6.31%) than the decrease (of -12.94%) in HBIO's revenues, we should expect that HBIO experienced an decrease in their Q1 gross profits.
  • HBIO Gross Profit: In Q1 2022, HBIO experienced a quarterly decrease in their gross profit of $-3.38M (or -17.3%) resulting in a total gross profit of $16.18M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between Q1 2022 and Q4 2021.
  • HBIO EBITDA: In Q1 2022, HBIO experienced a quarterly decrease in their EBITDA of $-5.54M (or -736.44%) resulting in a total EBITDA of $-4.79M. This decrease (of -736.44%) stems from the fact that HBIO experienced a decrease in their gross profits of -17.3% (as we saw in the previous bullet point).
  • HBIO Net Income: In Q1 2022, HBIO experienced a quarterly decrease in their net income of $-7.84M (or -815.92%) resulting in a total net income of $-6.88M.
  • HBIO EPS: As a result of HBIO's decrease in net income of $-7.84M, HBIO's EPS also decreased (by $-0.19) from $0.02 in Q4 2021 to $-0.17 in Q1 2022

Overall, it seems as though HBIO had a poor financial performance (due to EPS $-0.19) as many of their financial metrics shrunk, most notably their EPS (by $-0.19), as well as their net income (by $-7.84M), and other metrics (as you can tell from the above bullet points).

Additionally , HBIO stock missed their EPS estimate by $-0.01(or -20%), as they reported an EPS of $0.04 for the quarter (compared to their estimated EPS of $0.05).

Is HBIO Share Dilution an Issue?

As part of their Q1 2022 earnings release, HBIO stated that they currently have 41.22M Shares Outstanding (weighted average), which is up 379k shares (from 40.84M shares outstanding in Q4 2021). This represents a dilution of around 1% which should be important to HBIO investors.

Furthermore, HBIO stock has up to 2.53M of shares that they can issue (thereby diluting HBIO's stock). This maximum dilution for the period would only have a dilutionary effect on HBIO of 6%. This is a very sizeable amount of potential dilution, and should be cause for concern for HBIO investors.

Latest HBIO Stock Analyst Ratings

Here is the current analyst rating distribution for HBIO. In total there are 5 HBIO stock analyst ratings.

  • 5 Buys
  • 0 Holds
  • 0 Sells

Analyst Ratings have provided relatively strong indicators of future price movement, which is why they are used to determine if HBIO stock is a buy or sell

HBIO Stock Price Forecast

HBIO Price Forecast Using Comparable Analysis

  1. Price to Book (P/B): HBIO's current P/B ratio is 2.02, compared to the average P/B ratio of HBIO's peers being 2.4. This implies that HBIO is undervalued and their share price should change by a factor of 18.68% to be at fair value (based on HBIO's P/B compared to the P/B of their peers).
  2. Price to Equity (P/E): HBIO stock P/E ratio is currently -23.78, compared to the average P/E ratio of HBIO's peers being -2.4. This implies that HBIO is overvalued and their share price should change by a factor of -89.91% to be at fair value (based on HBIO's P/E compared to the P/E of their peers).

Overall, HBIO stock is overvalued and needs to experience a change in stock price of (an average of) -35.61% to be considered “at fair value”.

Is HBIO Stock a Buy or Sell?

Overall, due to the fact that HBIO has done particualrly poorly on their most recent yearly and quarterly earnings, as well as the fact that the HBIO Price Forecast (via a comparable analysis of P/E and P/B) found that HBIO was overvalued and need to experience a price change of -35.61% in order to be at their fair value, I have concluded the following:

HBIO is most likely overvalued, and their financials are not strong. As a result, I would consider taking a bearish position (if any) in the HBIO stock. I would look for a decrease of 15-20% before considering exiting this position.

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HBIO

Harvard Bioscience, Inc.

3.70

0
0.00%

Return

-
Position Return %
0.00
Position Return
4.34
Price When Posted

Metrics

3.67
Target Price
8/ 10
Confidence
1-2 Months
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