Rapid Micro Biosystems Inc

Rapid Micro Biosystems, Inc. (NASDAQ: RPID) is a life sciences technology company. The Company provides automation solutions to facilitate the manufacturing and release of healthcare products, such as biologics, vaccines, cell and gene therapies, and sterile injectables. Its flagship Growth Direct platform automates and modernizes the manual microbial quality control (MQC), testing workflows used in pharmaceutical manufacturing operations across the globe.

Recent Financial and Business Updates:

• Robust Financial Performance and Strategic Guidance: The company reports significant growth in its financial performance for the fourth quarter of 2023, with total revenue reaching USD 6.3 million, marking a notable 45% increase compared to the fourth quarter of 2022. Furthermore, the full-year revenue for 2023 amounted to USD 22.5 million, demonstrating a commendable 31% growth compared to the previous year. The company also achieved recurring revenue of USD 13.5 million in 2023, representing a 23% increase from 2022. Looking ahead, the company provides a robust revenue guidance for 2024, expecting to surpass USD 27.0 million, reflecting a minimum 20% growth compared to 2023.
• Recent Operational Highlights: In the recent period, the company achieved several notable operational milestones. During the fourth quarter of 2023, it recorded a significant 45% growth in revenue compared to the same quarter in 2022. Additionally, the company placed six Growth Direct systems during the fourth quarter, marking the highest number of placements since the third quarter of 2021. Notably, the Growth Direct systems are now utilized by 100% of commercially approved CAR-T therapy manufacturers, showcasing the platform's widespread adoption. Moreover, the company announced the anticipated availability of a new Rapid Sterility application for the Growth Direct system by mid-2024, further enhancing its product portfolio.
• Fourth Quarter Financial Insights: In the fourth quarter of 2023, the company witnessed a substantial increase in total revenue, driven by a 45% surge to USD 4.1 million in product revenue and a corresponding 45% rise to USD 2.2 million in service revenue. Moreover, recurring revenue increased by 13% to USD 3.3 million in the same period. Notably, despite a 45% rise in total revenue, the total cost of revenue decreased by 7%, resulting in a significant improvement in gross margin. The company's strategic actions to reduce product costs and enhance manufacturing efficiency contributed to this improvement.
• Full-Year Financial Review and Future Outlook: For the full year of 2023, the company reported a robust financial performance, with total revenue reaching USD 22.5 million, driven by a 34% increase in product revenue and a 27% rise in service revenue compared to 2022. Despite a net loss of USD 52.5 million in 2023, the company projects a positive trajectory for 2024, aiming for total revenue of at least USD 27.0 million, and plans to place a minimum of 20 systems throughout the year, underscoring its commitment to sustained growth and innovation in the industry.

Technical Observation (on the daily chart)

The Relative Strength Index (RSI), calculated over a 14-day span, stands at 50.32, currently falling, signifying the likelihood of more consolidation. Adding to this, the stock presently finds itself positioned above both the 21-day and 50-day Simple Moving Averages (SMA), which could function as a dynamic short-term support levels. Now, the stock's price is currently inside a support zone of USD 0.90-USD 1.00, with expectations of an upside movement in case this support zone holds.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

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

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

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 unfavourable movement in the stock prices. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar

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 March 01, 2024. 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.