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23andMe Holding Co Class A - Stock Quote ME

Rating as of

Morningstar's 23andMe Holding Co Class A Stock Analysis

Valuation
Currency in USD

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Initiating Coverage of 23andMe, a Risky Healthcare Technology Company With Substantial Upside

Dylan Finley, CFA Equity Analyst

Analyst Note

| Dylan Finley, CFA |

While shares of 23andMe have fallen since going public earlier last year via a special-purpose acquisition company, the company has made a splash over the past decade, driving a brand-new market for direct-to-consumer genetic testing. Out of the 12 million customers who have had their genetic data analyzed by the company, over 80% of have opted in to sharing their de-identified genetic data and research survey responses with 23andMe. Nevertheless, we do not believe the company possesses an economic moat, due to the wide availability of competitor kit companies and lack of pricing power in the market. While our fair value estimate of $8.30 per share suggests a substantial premium versus where the stock currently trades ($3.39 at market close), our valuation is particularly sensitive to the assumptions we’ve made in the company’s therapeutics business. As such, we caution investors, with an extreme uncertainty rating on the company.

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23andMe Holding Co Class A's Company Profile

Business Description

23andMe is a consumer-facing healthcare technology company, primarily involved in the sale of direct-to-consumer personal genome services, or PGS, through DNA collection kits shipped via mail. The company provides users access to reports summarizing estimated genetic ancestry breakdown, phenotypic trait reports, and various health predisposition and disease carrier reports. More than 80% of 23andMe customers voluntarily elect to share their de-identified genetic data with the company, which is used to develop future reports. In 2018, GlaxoSmithKline made an equity investment in the company, entering a five-year collaborative agreement with 23andMe to develop drug candidates.

Contact
Sunnyvale
Sunnyvale, CA
T +1 800 239-5230
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Dec 31, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees