Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Fulgent Genetics, Inc. is a technology firm that provides COVID-19 testing, molecular diagnostic testing, and comprehensive genetic testing services with the goal of giving doctors and patients clinically useful diagnostic information to enhance the quality of patient care. The business creates a technological platform

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

With a greater gross profit margin than the industry median, FLGT is more effective at controlling its cost of sales and negotiating favorable terms with its suppliers. Additionally, a lower debt/equity ratio compared to peers indicates lower-risk investments in terms of expected returns. Finally, a greater current ratio indicates that the company is managing its working capital and short-term liquidity well.

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 and Outlook

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 December 21, 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.