The shares of Progenity Inc (NASDAQ: PROG) increased by more than 20% pre-market today. This is a continuation in momentum as the stock price increased by 39.48% in the previous trading session as well. There are no company-specific reports or filings from the company driving up the stock price so it appears there are external factors at play.
Bullishness towards PROG stock has been supported by its relevance among retail investors. As the share price rises, so have the company’s popularity online.
Financial Overview
Since that last run, Progenity reported third-quarter earnings on Nov. 10, and it had only $182,000 in revenue and a net loss of $43.7 million. Those numbers were an improvement from the $52,000 in revenue and a net loss of $47 million it reported in the same period a year ago, but the company seems to belong way from making a profit.
The company generated $9.6 million in revenues during the third quarter, out of which $9.4 million came from discontinued operations. Operating expenses were $30.7 million for the three months ended September 30, 2021, compared to $36.1 million for the three months ended June 30, 2021.
The stock will likely continue to be volatile, though there may be some support for long-term optimism. It recently received four patents connected with its GI tract delivery system for therapeutics. It has also said it has begun several cost-cutting measures to improve its profitability.
Once bullishness spreads, the psychological factor becomes key. While positive sentiment keeps luring retail investors to jump in, as trading volume increases alongside the stock price. The PROG stock could still benefit in the short term from buyers overcrowding the trade.
however, this is how the company will be able to afford to develop its patents in the interim without much cash coming in. It has gone from having $91.5 million in cash last Dec. 31 to $65.9 million at the end of June to $54.1 million at the end of September.
Lastly, keep in mind that PROG is still 63% down from its IPO price, as the biotech sector is generally rich in high-risk, high-reward opportunities. This could serve as an encouragement to those who may fear buying the stock at $3 more than it was worth at the start of Q4.
