Chardan Capital Trims PT on StemCells (STEM) to $1 Amid Capital Preservation Plans

Chardan Capital trims its price target on Buy-rated StemCells (Nasdaq: STEM) from $1.55 down to $1 following news that the company would shutter its AMD study for capital preservation.

Analyst Keay Nakae noted the following:

• Adjustments to Our Estimates: Our revenue estimates for 2015 and 2016 remain unchanged at $0.1 MM in each year. For 2015, our GAAP EPS estimate is unchanged at ($0.41). For 2016, our GAAP EPS estimate in increased by $0.05 to ($0.27) in 2016 to reflect a reduction in operating expense of $7.3 M M. We are now modeling a cash burn from operations of $25.6 MM in 2016.
• We Maintain Our BUY Rating But Are Lowering Our 12-Month Price Target to $1.00: We believe that STEM is an intriguing speculative small cap investment story, based on its limited human data thus far. Additional interim clinical data is expected to be reported during 2016 from its Phase 2 PATHWAY cervical spine study, which could provide further support for our investment thesis. We agree that this decision to conserve capital is pragmatic, even at the cost of pushing out the AMD opportunity, as we view the nearer term data from the PATHWAY study, if positive, as more leveragable. Our 12-month price target is reduced to $1.00 to reflect the negative impact of the delay in potential future revenue from AMD.

For an analyst ratings summary and ratings history on StemCells click here. For more ratings news on StemCells click here.

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