InVitae's 'Long, Uncertain Path' Toward Profitability: Analyst Downgrades Biotech

Shares of Invitae Corp NVTA came under pressure on Monday, after gaining more than 24% in January.

Despite having a restricting plan in place, the biotech company has a “long path to profitability,” according to Goldman Sachs.

The Analyst: Matthew Sykes downgraded the rating for Invitae from Neutral to Sell, while reducing the price target from $4 to $2.

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The Thesis: Although the latest restructuring efforts are “strategically necessary,” the company is likely to emerge as a lower-growth player in competitive end markets, Sykes said in the downgrade note.

Invitae seems to have “a long and uncertain path towards profitability and a gross margin profile that will make it difficult to deploy opex in order to re-accelerate growth,” the analyst added.

“Given the current market environment, we believe raising capital to fund the company’s current operations will remain difficult and do not see NVTA turning EBIT positive until 2028+,” he further mentioned.

NVTA Price Action: Shares of Invitae had declined by 5.24% to $2.35 at the time of writing Tuesday.

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