Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Would be interested in your views regarding this stock. Bell recently has it as a buy. This stock particularly peaked my interest as I know there is a lot of research in this area. From a personal note, we have had direct exposure to this horrendous disease. So emotion aside CHS could have huge upside.
Hi Mark,
CGS is a relatively small $390mn neuroscience technology company that makes money by providing cognitive testing services and software to pharmaceutical and biotech companies running clinical trials. It earns revenue through long-term contracts for study setup, test licensing, data management, analytics and ongoing support, as well as from healthcare providers using its cognitive assessment tools. Bells do cover the stock and have a $2.90 price target. Canaccord (Buy $3.15 PT) & Taylor Collison (Buy $3.51 PT) also have active coverage.
CGS does great work in the tough area of neurodegenerative diseases, particularly Alzheimer’s disease. It also supports clinical trials across other cognitive disorders, including Parkinson’s, schizophrenia, depression and brain injury, though Alzheimer’s remains its core area of activity.
There earnings numbers this week were solid with revenue coming in at $26.9mn and earnings per share (EPS) of $0.26 but we note that the stock has rallied strongly over the last 18-months. It trades on 22x consensus FY26 earnings.
We like the company, though it often trading less than $500k a day. The risk/reward appeals to us ~$2, or 10% below Friday’s price.
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