It may not be the “end all, be all” development for Bionano Genomics (NASDAQ:BNGO). But its strong fiscal performance last quarter isn’t something that should be ignored. Unfortunately, that’s what appears to be happening with BNGO stock post-earnings.

Since releasing results after the close Nov. 4, the life sciences stock price has taken a sharp move lower. Trading for around $6 per share ahead of earnings, it’s now at around $4.50 per share. What’s driving this?

As I see it, the market at large is missing the forest for the trees.

That is, they’re focusing on the relatively small amount of revenue Bionano generated last quarter. Also, the high increase in its operating expenses. Comparing this with its $1.2 billion valuation, it’s not adding up in their minds. Yes, at first glance, it doesn’t make sense why a company of this size sports such a high valuation.

But given all factors at play, this is still a high-potential growth stock. One that’s not getting its due from the market. And taking a closer look, you’ll see why this stock, which many are still dismissing as a meme play that’s fizzled out, may be a great opportunity at present price levels.

BNGO Stock and Recent Results

For the quarter ending Sep. 30, Bionano generated $4.7 million in sales, up 112% year-over-year. Just like what played out last quarter, this early stage company has once again posted triple-digit-percentage revenue growth. This was the sixth quarter in a row that the company has beat analyst revenue estimates. These strong results are due to increased installations of its Saphyr optical genome mapping (OGM) instrument.

Yet again, this wasn’t enough to get investors excited again about BNGO stock. Investors took issue with low revenue levels and rising operating expenses. Last quarter, operating expenses came in at $21.8 million, up moderately from the prior quarter ($17.9 million), and up tremendously from the prior year’s quarter ($11 million).

This tepid response, however, is short-sighted.

If the market took the time to really dig into the results, they would see that Bionano is making major progress with Saphyr. For example, as stated in the earnings press release, the company delivered a record number of Saphyr shipments. Along with growing the installed base of its flagship system from 121 to 141 on a quarter-over-quarter basis, it also saw a big increase (122% year-over-year) in the sale of nanochannel array flow cells used with the instrument.

Better yet? These solid results are just the first bits of success the company will have with its main product. It has all the ingredients in place to ramp up its sales going forward.

Bionano Will Continue to Prove a Skeptical Market Wrong

Although I believe the market’s wrong on BNGO stock, I don’t expect investors to change their tune quickly. They’ve found enough in the company’s latest quarterly results to maintain their view that it’s still an overhyped stock. One that will continue to fall short of the high expectations many may have once had for it.

Even so, there’s a lot in motion that, all together, could really change the current view most investors have on Bionano. For starters, thanks to its secondary offering back in January, the company has the cash it needs to scale up. With $326 million in cash, it has more than enough on hand to sustain continued cash burn, before it reaches the point of profitability.

Also, more is coming out to make the argument as to why this company’s method may be better for genome mapping. For instance, in a study published in The Journal of Molecular Diagnostics, the Saphyr OGM method gave faster and more accurate results than the traditional Southern blot analysis method. These demonstrated advantages could go a long way in convincing end-users to make the switch.

To top things off, the company continues to improve the Saphyr system. Like what I discussed when talking about Bionano last month, its recently announced deal to buy BioDiscovery could result in a further “leveling-up” of its platform’s capabilities.

The Bottom Line

Recent results may be doing little to change the market’s mind on Bionano. But I wouldn’t take their continued lack of appreciation for this highly promising early stage company as a sign you should steer clear. I give it a “B” in my Portfolio Grader.

If you dig into the details, it’s clear it’s still making progress with Saphyr. Expect things to take some time. But give it a few more quarters, and the market’s blasé view of BNGO stock stands to change in a big way.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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