NEW YORK (TheStreet) -- Shares of WaferGen Bio-systems (WGBS) were gaining 42.8% to $2.17 with heavy trading volume on Thursday after the biotechnology company said it expects to report record revenue for the third quarter.
WaferGen said it expects to report revenue of $1.9 million to $2.1 million for the third quarter, which would represent a 52% to 68% increase compared to the $1.3 million in revenue it reported in the year-ago quarter.
Analysts expect the company to report revenue of $2 million for the quarter.
The company said sales of its SmartChip products and services, which represented about 67% of its total revenue for the quarter, are responsible for the high revenue.
WaferGen also raised its full year 2015 revenue guidance to a range of $7.8 million to $8.2 million from its previous range of $7.5 million to $7.8 million.
About 7.7 million shares of WaferGen were traded by 10:16 a.m. Thursday, above the company's average trading volume of about 710,000 shares a day.
TheStreet Ratings team rates WAFERGEN BIO-SYSTEMS INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
We rate WAFERGEN BIO-SYSTEMS INC (WGBS) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry. The net income has significantly decreased by 81.7% when compared to the same quarter one year ago, falling from -$2.10 million to -$3.82 million.
- Net operating cash flow has decreased to -$3.63 million or 27.00% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WAFERGEN BIO-SYSTEMS INC has marginally lower results.
- WGBS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 71.69%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, WAFERGEN BIO-SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- WGBS, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 7.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: WGBS