Are GBS Stocks Buying Under $1?

Shares of biosensor diagnostic technology company GBS (GBS) have fallen more than 50% in price this year, reflecting investor pessimism. The company’s weak financial position seems to overshadow the company’s positive development. So, can penny stocks gain momentum any time soon? Read on, let’s discuss.

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Biosensor diagnostic technology company GBS Inc. (GBS) in New York City offers a variety of products, including the Biosensor Platform Technology, Saliva Glucose Test (SGT), and Saliva Glucose Biosensor (SGB). GBS’s share price has dived 89.1% over the past year and 80.8% over the past six months. The stock has fallen 53.3% year-to-date to close its last trading session at $0.67.

The company had previously announced plans to begin preparation of rapid SARS-CoV-2 antibody test clinical trial preparations following clinical validation studies. “We believe the evidence from validation studies at the Wyss Institute supports the efficacy of our SARS-CoV-2 Antibody test, and we are now in a confident position to begin preparations for the next phase of the trial,” said GBS CEO and Interim Chair of the Board, Dr. Steven Boyages. In addition, GBS, in collaboration with Life Science Biosensor Diagnostics Pty Ltd (LSBD), the licensor of Rapid Saliva Glucose Test, applied for the FDA Breakthrough Device Designation to provide LSBD with regulatory approval for a non-invasive, real-time Saliva Glucose test.

However, the company’s weak financial position has raised investor concerns, overshadowing positive developments.

Click here to check out our Health Sector Report for 2022

Here’s what could shape GBS’s performance in the near future:

Gloomy finances

For the fiscal second quarter, ending December 31, 2021, GBS’ total revenue fell 37.2% year-on-year to $177,791. Its loss from operations grew 277.9% from last year’s value to $3.47 million. Also, its net loss was $3.46 million, reflecting a 74% year-over-year increase, while its net loss per share was $0.23. Additionally, the company’s 12-month net loss and net loss per share amounted to $8.87 million and $0.67 million, respectively. And the last 12 months of cash flow from operations and leveraged free cash flow were $9.18 million and $5.53 million, respectively.

Bad Profitability

GBS’s negative 279.46% leveraged FCF margin is much lower than the negative 0.48% industry average. Also, its ROE and ROA are negative 61.42% and 58.24%, respectively, compared to the negative industry averages of 36.11% and 23.57%, respectively. Furthermore, the asset turnover ratio of 0.11% is 66.9% lower than the industry average.

POWR Ratings Reflect This Gloomy Prospect

GBS has an overall F rating, which is a Strong Sell in our proprietary POWR Rating system. The POWR rating is calculated taking into account 118 different factors, with each factor being weighted to an optimal level.

The stock has a D for Growth, which is consistent with its dismal financial growth.

It has a D for Quality, which aligns with its negative profitability metric.

Among 166 stocks in the D-rated Medical – Devices & Equipment industry, GBS is ranked #159.

Beyond what I’ve stated above, you can also see GBS values ​​for Sentiment, Stability, Momentum and Value here.

View the top-rated stocks in the Medical – Devices & Equipment industry here.

The main thing is

GBS invests heavily in the development of breakthrough products and engages with partners worldwide to initiate clinical studies, establish first-class manufacturing facilities and establish sales partnership opportunities in Asia. However, its financial position is worrying, with analysts expecting its EPS to remain negative this year. So, we thought it might be wise to avoid stocks for now.

How to GBS Inc. (GBS) Against His Colleagues?

While GBS has an overall POWR Rating of F, one might want to consider investing in the following Medical – Devices & Equipment stocks with an A (Strong Buy) rating: Fonar Corporation (FONR), Electromed, Inc. (ELMD), and Abbott Laboratories (ABT).

Click here to check out our Health Sector Report for 2022

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GBS shares were down $0.01 (-1.49%) in Wednesday’s premarket trading. This year, GBS has fallen -53.31%, compared to a -12.36% gain in the benchmark S&P 500 index during the same period.

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About the Author: Subhasree Kar

Subhasree’s interest in financial instruments led him to pursue a career as an investment analyst. After earning a Master’s degree in Economics, he acquired knowledge of equity research and portfolio management in Finlatics.

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