Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Founded in 2011, Fulgent has evolved into a premier, full-service genomic testing company built around a foundational technology platform. Through its diverse testing menu, Fulgent is focused on transforming patient care in oncology, anatomic pathology, infectious and rare diseases, and reproductive health.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

FLGT has a higher gross profit margin compared to the industry median depicting higher efficiency in managing the cost of revenues and negotiable terms with its suppliers. Furthermore, a better debt/equity ratio means lesser risk investments compared to its peers in terms of expectations of returns. Lastly, a higher current ratio means efficiency in managing the short-term liquidity as well as proper working capital management by the firm.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~58.20% of the total shareholding, signifying concentrated shareholding. Hsieh (Ming) and BlackRock Institutional Trust Company, N.A.  are the biggest shareholders, holding the maximum stake in the company at ~29.50% and ~11.09%, respectively.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY22:

Section 3: Key Risks

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple-Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 23, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Disclaimer

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