Shares of Predictive Technology Group Inc (OTCMKTS:PRED) have been flying, ever since the company reported a 216% increase in revenues. The stock has also been buzzing on the company confirming a number of appointments as it moves to tap the best talent to accelerate growth.
PRED Share Price Analysis
The management forecasting yet another record-breaking year could explain the renewed investor interest in the stock. High turnover in traded shares has helped catapult the stock to levels last seen mid last year before the stock imploded to one-year lows.
Price action activity indicates the stock is flirting with a critical resistance level at the $2.17 a share level. A breach of the $2.40 level should reaffirm the emerging uptrend, setting the stage for the stock to make a run for one-year highs.
Predictive Technology remains well positioned to continue climbing the ladder, given the underlying developments that continue to strengthen investor sentiments in the stock. A rally followed by a close above the $2.40 level, should open the door for bulls to regain control from short sellers, who had threatened to push the stock to all-time highs.
Conversely, below the $2.17 level, Predictive Technology remains vulnerable to further drops given the underlying long-term bear trend. Sell-offs from current highs will have to contend with support at the $1.50 level.
A violation of the critical support level would leave the stock susceptible to a drop probably to the $0.90 level, the next substantial support level. A breach of the $0.90 level, on the other hand, could accelerate the downward pressure, which could see the stock plunging to the $0.30 level.
However, Predictive Technology remains well positioned to continue edging higher.
What Does Predictive Technology Do?
Predictive Technology develops and commercializes discoveries as well as technologies for novel molecular diagnostics. The company operates two segments of regenerative medicine products and that of diagnostics and therapeutics.
Why is Predictive Technology Skyrocketing?
A spike in share price, as well as market activity, follow the delivery of an impressive financial report that underscores robust growth in the core business. For the Three months ended December 31, 2018, Predictive Technology says it generated revenues of $10.7 million, compared to $3.4 million reported a year ago.
The company attributes the 215% increase in revenues to the expansion of its sales forces as well as the distribution network that allowed it to target a broader target market. Predictive Technology also registered more sales for its HCT/Ps and regenerative medicine in 2018, than it did the previous year.
During the year, the company also increased its focus on research and development as it sought to strengthen its product pipeline. Conversely, the company spent $1.8 million on R&D compared to $37,000 spent the previous year.
In addition, the company has invested vast sums of money on laboratory support as it eyes the sale of more diagnostics products.
The company completed the 2018 fiscal year with a strong balance sheet of $2.6 million, having generated $2 million in positive cash flow in the last six months of the year. The company has also filed a Form 10 registration as it eyes listing in the Nasdaq Market.
“Predictive is now a fully reporting company, providing investors with heightened transparency of our financials and operations,” he added. “Importantly, this filing is a major step in the process to list our common stock on NASDAQ, which we expect will provide greater visibility and credibility, and expand our reach to a substantially larger market.,” said CEO Bradley C. Robinson.
In addition to the stellar performance, Predictive Technology has strengthened the level of expertise and talent in its board of directors, the company has consequently confirmed the appointment of Senator Orrin G. Hatch and Ronald Barhorst to the board.
“Their extensive backgrounds and experience are ideally suited for contributions to Predictive as we continue to mature and evolve as a publicly reporting company,” said Mr. Robinson.
Predictive Technology skyrocketing in the market does not come as a surprise given that the company has proved it is in a phase of robust growth. A 216% increase in revenue, in the recent quarter, affirms what investors should expect, as the company continues to strengthen its sales channels.
Given that the stock is currently trading close to a critical resistance level, it might be wise to wait for pullbacks before entering long positions. A breach of the resistance level should open the door for bulls to bet on further movements to the upside.
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Disclosure: We have no position in PRED and have not been compensated for this article.