T2 Biosystems (TTOO) stock price volatility has died: buy the dip?

By:
on Nov 13, 2023
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  • T2 Biosystems share price has crashed to a record low this year.
  • Its total revenue has collapsed because of weak COVID-19 demand.
  • The company expects its total revenue will remain under pressure in Q4.

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T2 Biosystems (NASDAQ: TTOO) stock price has collapsed to a record low as concerns about the company’s future continued. Shares of the popular penny stock have collapsed to a split-adjusted low of $4.72, meaning they have plunged by over 92% this year. They have also fallen by almost 100% from their all-time high.

T2 Biosystems is not doing well

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T2 Biosystems stock price is not doing well, which has pushed more insiders to dump it. The most recent data shows that there have been 7 sales in the past three months. They have sold over 48 million shares. 

TTOO business has not been doing well, in line with other companies that boomed during the Covid-19 pandemic. On Monday, we wrote that Pfizer stock price had tumbled to a multi-year low. Similarly, companies like BioNTech and Novavax have all plunged.

T2 Biosystems benefited during the pandemic as demand for its testing solutions jumped. Now, with most people not focusing on Covid, demand has plummeted, as evidenced by the recent results.

The company’s revenue plunged by 60% YoY in the third quarter because of a sharp decline in BARDA revenue. Its sepsis test panel revenue fell by 31% to $1.1 million, signaling that its underperformance is broad-based.

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There were several bright spots in its financial release. For example, the company reduced its total debt by $10 million into shares. It ended the quarter with over $24.3 million in cash and cash equivalents. 

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The current cash balance is higher than the company’s combined market cap. While this is a good sign, the company still has millions in debt and is burning more money every quarter.

The other important report was that it had received the FDA approval for its T2Biothreat Panel. This will be the only FDA-cleared multi-target biothreat test created by an American company. It also made several FDA-related announcements.

The challenge for T2 Biosystems and TTOO stock is that it is not making more money today and that it is still burning cash. It expects to make just $2.4 million in revenue in the fourth quarter. It sees its full-year total product revenue soaring to $7.5 million, down by 10% from the same period in the previous year.

TTOO stock price forecast

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TTOO chart by TradingView

In my last article on T2 Biosystems, I warned that the shares would continue falling since the company faces more headwinds than tailwinds. Sadly, I see no major catalyst for the stock since it faces huge challenges in this high-interest rate environment. 

The stock’s volatility has dried and is consolidating at the 25-day and 50-day moving averages. Also, the Average True Range (ATR) has crashed hard. Therefore, I suspect that the stock will continue falling in the near term as demand dries up, This drop could see it move below the support at $2.

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