StageZero Life Sciences Ltd. (TSX: SZLS) is a Canada-based company focused on developing and commercializing molecular diagnostic tests for the early detection of cancer. It has developed Sentinel Principle platform technology, which determines biomarkers from whole blood.

Key Highlights 

• In Q3 2021, the Company generated revenue of USD 0.68 million, down from USD 1.46 million in the previous comparable period, and recorded a consolidated net loss of USD 2.2 million, down from USD 2.3 million in the previous corresponding period.

• During the quarter, the business opened its first on-site clinic to support all of its initiatives, including its next-generation multi-cancer blood test Aristotle, which can detect many cancers from a single blood sample. Aristotle will cost USD 1500 and will be available to Care Oncology's existing US patients (3,000+) as well as immediate family members who are concerned about their personal cancer risk.

• CareOncology's recent purchase has put the company at the nexus of three of today's most interesting healthcare trends: early diagnosis, liquid biopsies, and telemedicine. StageZero is well-positioned to spark change in healthcare because of this combination and its patented technology.
  

Stock recommendation

Going ahead, we anticipate the business will stick to its long-term goal of improving cancer detection capabilities and improving predictive modeling to gain a deeper understanding of the disease and health spectrum. It's also increasing the usage of the Aristotle multi-cancer pane, which is a significant plus. Its current concentration is on cancer, in all of its various forms and phases, but the framework of its approach may be applied to other diseases as well, which is a major plus. From the valuation standpoint, the company is now trading at a TTM EV to Sales multiple of 2.6x, which is much lower than the industry (healthcare) median of 5.4x. Furthermore, the markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. Hence, based on the above rationales we recommend a “Watch” rating on the stock at the closing price of CAD 0.21 on February 24, 2022.

One-Year Technical Price Chart (as on February 24, 2022). Source: REFINITIV, Analysis by Kalkine Group

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