T2 BioSystems stock: brace for TTOO volatility this week

T2 BioSystems (NASDAQ: TTOO) stock price has moved from one of the most popular names in Wall Street into a forgotten one. The shares have gone nowhere since October and are now sitting near their lowest level on record. They have plunged by over 93% from last year’s high of  $70.

T2 BioSystems earnings ahead

T2 BioSystems has come under pressure in the past few months. For one, the daily traded volume has plunged and the company is no longer trending in popular platforms like Reddit and StockTwits. According to Yahoo Finance, the daily volume on Friday stood at 160k, a big improvement from Thursday’s 36k. This month, the volume has been less than 500k.

This is a big deviation from what happened a few months ago as the company gained popularity. In October, the daily volume was averaging over 1.5 million shares. On December 28th, the daily volume stood at over 3.9 million.

The company could attract some volume when it publishes its financial results on Thursday this week. Historically, small-cap stocks in the health and biotech industry tends to show some volatility after publishing their results. Last week, Intelligent Bio Solutions (INBS) stock price surged by more than 150% after the company’s loss per share beat analyst estimates.

The most recent results, published in October, showed that the company’s business was still feeling the heat after the COVID-19 pandemic ended. Its revenue came in at $1.5 million, much lower than the $3.7 million which it made in the same quarter a year earlier.

The management provided better forward guidance. It expects that its sepsis and related revenue will be $2.4 million, bringing the annual figure to $7.5 million. Further, the company worked to improve its balance sheet by raising cash and converting $10 million of a loan to equity. It also raised funds, which brought its total cash to $24.3 million, higher than the current market cap of $19.1 million.

T2 BioSystems is not followed by many Wall Street analysts. Those who do expect that its revenue will be $2.4 million while its loss per share will be $2.20.

TTOO stock price forecast

TTOO chart by TradingView

It is always difficult to make a prediction for a company before its earnings report. It is more difficult for a company like TTOO that is not followed by many Wall Street analysts. A closer look at its past three earnings shows that it traded differently. In its most recent report, the stock retreated by over 8%. In its other report, in August, the stock surged by over 85%. 

This week’s report comes at a time when the stock has found strong support at $3.50. It has failed to drop below this level several times since December last year. The Average True Range (ATR) has also retreated. Therefore, while it is hard to predict, a major breakout cannot be ruled out.