$11.72 -$0.42 (-3.5%)

04:30 PM EDT on 05/17/19

Fluidigm Corp. (NASDAQ:FLDM)

CAPS Rating: 1 out of 5

Current Price $11.72 Mkt Cap $837.9M
Open $12.04 P/E Ratio 0.00
Prev. Close $12.14 Div. (Yield) -$0.76 (0.0%)
Daily Range $11.71 - $12.25 Volume 145,173
52-Wk Range $8.18 - $14.88 Avg. Daily Vol. 17

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Top NASDAQ:FLDM Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

Chinoster7u (< 20)
Submitted September 25, 2012

They are creating the new wave of medical diagnostic machines. The tiny scale of their devices will increase use in space, the battlefield, 3rd world countries, scientific research and even robotics and computing. Besides increasing use it will… More

TerryHogan (99.97)
Submitted October 16, 2018

Lots of debt, hasn't had positive cash flow since inception as far as I can tell. Lots of dilution. Has one of those names that looks like it was created by a committee trying to maximize investor appeal. My only hesitation is the massive buys by one… More

NASDAQ:FLDM VS S&P 500 (SPY)

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Recent Community Commentary

Read the most recent pitches from players about FLDM.

Recs

0
Member Avatar TMFBlacknGold (91.13) Submitted: 3/13/2019 12:37:25 PM : Outperform Start Price: $12.31 NASDAQ:FLDM Score: -6.75

Oops, forget to trigger this CAPS pick when I wrote this article (share price = $9.66). From February 11th, 2019:

"The 1 Stock I'd Buy Right Now
Most investors have probably never heard of this small-cap laboratory equipment supplier, but it reached an important inflection point in 2018.
Maxx Chatsko (TMFBlacknGold)
Feb 11, 2019 at 5:03PM
Unless you're a scientist, Fluidigm (NASDAQ:FLDM) is probably not in your lexicon. This business sells specialized laboratory instruments and the chemical reagents needed to operate them. That makes it pretty easy to overlook, as does its market cap of just $450 million. Agilent Technologies (NYSE:A) and Illumina (NASDAQ:ILMN) weigh in at a combined $65 billion by comparison.

But investors willing to take a deeper dive into the business and its trajectory might find reasons to get a little excited about the company's long-term potential. Fluidigm focuses on an emerging area of biology-based technologies and, despite struggling to scale in recent years, appears to have discovered a sustainable way to monetize its expertise in 2018. If the business can continue to execute, then it should be on the path to profitable growth -- and maybe a spot in your portfolio.

A handful of capsules next to a thermometer.
IMAGE SOURCE: GETTY IMAGES.

The business
Fluidigm relies on the tried and true (albeit difficult to scale) business model of lab hardware innovators. The company generates upfront revenue by selling machines to academic and biopharma labs around the world and then has the opportunity to generate recurring revenue from the installed base of machines by selling the chemical reagents needed to operate them.

The premier example of the business model in action is Illumina, which sells a portfolio of DNA sequencing machines and the accompanying consumables. While it's more commonly associated with its DNA sequencers in the minds of investors and scientists, the company generated 65% of its revenue from consumables in the first nine months of 2018.

Many companies are trying to replicate Illumina's success in their own niche areas. Fluidigm is focused on the up-and-coming field of single-cell analysis. That's the name for experimental techniques that allow researchers to study single cells in their natural biological environment, whether that's within a complex tissue sample or isolated in a fluid with finely controlled parameters. By studying how single cells change in response to environmental challenges in real time, scientists can discover novel therapeutic targets or better understand how metabolic pathways are turned on or off.

Fluidigm has a competitive advantage in developing single-cell analytical instruments thanks to its expertise in microfluidics, from which the company gets its name. It specializes in designing and manufacturing integrated fluidic circuits -- tiny silicon chips with channels carved out of them that allow for the precise control of liquid samples -- that make single-cell analysis possible.

A bird's eye view of various lab glassware and a clipboard.
IMAGE SOURCE: GETTY IMAGES.

By the numbers
The potential of single-cell analysis is huge, but adequately monetizing it has proved difficult. One problem was that Fluidigm was a little early on the single-cell analysis revolution. Another was that the specific instruments being sold didn't require large volumes of consumables.

While the company still sells a diverse portfolio of instruments, the results from 2018 strongly suggest its long-term viability is based on two core areas: real-time genomic analysis and mass cytometry. The former provides complementary data to traditional DNA sequencing methods (more finesse than Illumina's approach), while the latter provides unparalleled detail of complex tissue samples.

Mass cytometry is what should put Fluidigm on investors' radar. That's because it's one of the primary methods used to develop and study buzzy biotech technologies ranging from CAR-T to CRISPR. And because of that, it's in increasingly high demand. Consider the three-year trend in the company's installed base of machines:

Instrument Application

Annual Consumables Per Machine

Installed Base, 2018

Installed Base, 2017

Installed Base, 2016

Genomics, preparation

$27,500

200

245

230

Genomics, analysis

$47,000

550

560

585

Mass cytometry

$75,500

240

200

160

DATA SOURCE: PRESS RELEASES.

Fluidigm's machines for preparatory work are a little too niche, as more robust liquid handling instruments can do essentially the same thing. That makes the declining installed base a little less worrisome than it appears.

The company's genomic analysis portfolio is also slipping a bit, but these instruments should see an uptick in demand in the coming years as researchers begin to explore genomes in much greater detail. One application the machines enable is a technique called digital PCR, which even Illumina is keeping an eye on, as evidenced by its recent investment in start-up Stilla Technologies.

Meanwhile, Fluidigm appears to have finally found the most economical combination of microfluidics and single-cell analysis yet with its mass cytometry machines. They're in increasingly high demand in the field of immuno-oncology and provide the highest consumables potential of all instruments in the portfolio. It showed in the company's full-year 2018 results:

Metric

2018

2017

Year-Over-Year Difference

Mass cytometry revenue

$59.6 million

$46.8 million

27%

All other revenue

$53.4 million

$55.2 million

(3%)

Total revenue

$112.9 million

$101.9 million

11%

Gross profit

$61.6 million

$51.9 million

18%

Total operating expenses

$109.8 million

$110.3 million

0%

Operating loss

($48.1 million)

($58.4 million)

N/A

Operating cash flow

($25.2 million)

($24.0 million)

N/A

DATA SOURCE: PRESS RELEASE.

The emergence of mass cytometry has allowed Fluidigm to grow revenue without increasing operating expenses. That allowed all of the revenue increase to trickle down the income statement as profit. While the business still reported an operating loss of $48.1 million in 2018, down from $73.1 million in 2016, nearly half was non-cash expenses, as evidenced by operating cash outflows of just $25.2 million. It exited 2018 with $95 million in cash.

Fluidigm doesn't see demand for mass cytometry machines waning anytime soon, which isn't surprising considering they're the foundation for developing and studying next-generation immunology therapies. What's more, the business is increasing the consumables sold to operate each machine over time, from $62,500 per instrument in 2018 to an expected $75,500 in the year ahead. That suggests it has a committed user base and that the company's arrival at sustainably profitable operations could happen sooner than Wall Street currently estimates from growth of the installed machine base alone.

A man staring at a chart of expenses and profits. The chart has two intersecting lines, one labeled value and the other labeled cost.
IMAGE SOURCE: GETTY IMAGES.

Can this business capitalize on its life sciences R&D niche?
Fluidigm's expertise in microfluidics allowed it to swiftly pounce on the emerging opportunity of single-cell analysis in recent years, although perhaps it was a little too early. Last year the technology's potential appears to have finally started to catch up to what the company's platform can deliver.

The business is well positioned to continue exploiting an insatiable appetite for mass cytometry instruments, which could also illuminate a path to sustainable profits within the next few years. Meanwhile, Fluidigm's genomic analysis portfolio should rediscover growth as more scientists demand higher fidelity data from the living systems they study.

A lack of profits today result in shares trading hands at just 4.2 times sales (Agilent sits at 4.9 times sales and Illumina at 12.5) and a PEG ratio of only 0.7 (Agilent and Illumina are both near 2). However, patient investors with a long-term mindset might be willing to stake a small position in the promising lab-instrument provider, especially given its promising trajectory."

https://www.fool.com/investing/2019/02/11/the-1-stock-id-buy-right-now.aspx

Recs

1
Member Avatar TerryHogan (99.97) Submitted: 10/16/2018 2:04:28 AM : Underperform Start Price: $8.10 NASDAQ:FLDM Score: -41.30

Lots of debt, hasn't had positive cash flow since inception as far as I can tell. Lots of dilution. Has one of those names that looks like it was created by a committee trying to maximize investor appeal. My only hesitation is the massive buys by one hedge fund, but looking at their 13F, they've got huge positions in tons of stocks - looks like it might be algorithmic - it also holds lots of GE. Giving out stock like stale candy canes at a Santa Claus parade.

Recs

0
Member Avatar Under5 (< 20) Submitted: 9/25/2017 8:17:13 AM : Outperform Start Price: $2.85 NASDAQ:FLDM Score: +295.94

Looks good

Leaderboard

Find the members with the highest scoring picks in FLDM.

Score Leader

Under5

Under5 (< 20) Score: +274.47

The Score Leader is the player with the highest score across all their picks in FLDM.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
Under5 < 20 8/8/2017 Outperform 5Y $2.85 +311.23% +15.29% +295.94 1 Comment
4sigma 39.89 2/14/2012 Underperform 5Y $14.54 -19.39% +111.83% +131.22 3 Comments
CAPSTech 79.15 11/1/2013 Underperform 3M $31.39 -62.66% +62.87% +125.53 0 Comment
mountaincouger 28.69 7/25/2012 Underperform 5Y $12.95 -9.50% +112.97% +122.46 0 Comment
Squeege1981 < 20 12/24/2012 Underperform 3Y $14.44 -18.84% +100.71% +119.55 0 Comment
andrewdski 97.08 1/20/2015 Underperform 3M $36.47 -67.86% +42.28% +110.14 0 Comment
wahodges 87.69 5/19/2014 Underperform 5Y $27.08 -56.72% +52.36% +109.08 0 Comment
SeedTownBrothers 53.54 5/12/2017 Outperform 5Y $5.75 +103.83% +19.67% +84.16 1 Comment
Lmar 98.01 8/14/2015 Underperform 5Y $12.65 -7.35% +37.20% +44.55 0 Comment
dalepasta < 20 2/29/2016 Outperform 5Y $6.64 +76.51% +46.57% +29.94 1 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
TrackCowenandCo 76.51 1/20/2015 Outperform NS $35.77 -67.24% +41.29% -108.52 0 Comment
trackmizuho < 20 4/23/2014 Outperform NS $40.01 -70.71% +52.27% -122.97 0 Comment
TrackMaximGroup 64.25 6/27/2013 Outperform NS $16.53 -29.10% +77.51% -106.61 0 Comment
trackmizuho < 20 8/31/2012 Outperform NS $15.69 -0.35% +2.27% -2.62 10/9/2012 @ $15.63 0 Comment
TrackOppenheimer 51.36 10/5/2011 Outperform NS $14.49 -19.12% +153.92% -173.04 0 Comment
TrackDeutscheSec 82.46 3/23/2011 Outperform NS $15.00 -21.87% +121.37% -143.24 0 Comment

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