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u/Odd-Web4113
1 day ago
$GRAL Discussion - Diversification away from AI trade
I am trying to ensure I diversity a bit into opportunities that are not just AI driven. $GRAL stock price IMO is ahead of itself in short term b/c of a favorable FDA advisory committee outcome last month that looks like it will clear the path for FDA approval early 2027. But looking at the potential over 3-4 years - this company could be doing 10mm recurring tests in 2030 annually and 5X+ the current market cap.
* The Nancy Gardner Sewell Medicare Multi-Cancer Early Detection (MCED) Screening Coverage Act was signed into law this year and takes effect on January 1, 2028; and is set to allow for screening for anyone under 68 I believe. And, more importantly it allows for one test every year.
* This is the the best in class right now in MCED space and has run 100,000's of samples. They also have a head start in industry and building out infrastructure to allow for education and testing to the masses.
* they currently charge 995 per test, but b/c of the above law, Medicare will begin to cover prob by 2029 and allow ANNUAL screening. Even if price gets reduced to 500 - we can assume a profit of $200 to the company per test - 10mm\*200 = $2B earnings number. Assuming 20X - $40B vs current market cap of $6B currently. It is noted the company has no debt and cash burn lasts it through into 2030 in current state.
* Other things to consider - Samsung made a $100mm investment last year into the company to allow for distribution rights throughout Asia, which I am not even considering. So, 10mm tests per year could easily prove exceptionally conservative
* As suggested, I think it is may have gotten ahead of itself in short term and may prove choppy for 2027....but not when I look out 3-4 years for reasons I just mentioned, it appears to be a strong investment opportunity. Another play if you are more skeptical is invest in ILMN as they own just over 7% of GRAL
* I welcome thoughts, but figured this could diversify my investments a bit.