What’s Next for OraSure?

OraSure Technologies Inc., which also refers to itself as OTI, put out second-quarter results on Aug. 6.

I was still struggling then with whether I wanted to set up a news site, and how to do it, so I didn’t write about it. I won’t get into the details much now (they can be found at https://orasure.gcs-web.com/news-releases/news-release-details/orasure-reports-q2-24-revenue-543-million-0 ) but the big thing is, revenue fell again.

Second-quarter revenue was $54.3 million, down from $85.4 million in the year-ago quarter. That was no surprise. Bethlehem-based OraSure got lots of government money and contracts during the COVID-19 pandemic, and that is fading out.

It was no surprise, but it did raise the question: What is next for the company?

Meanwhile, the stock is wallowing. It closed at $4.27 on Monday, above its 52-week low of $3.92 but at barely over half of the 52-week high of $8.45.

In June, OraSure was dropped from the S&P SmallCap 600 Index. The index said OTI and a dozen other companies were no longer representative, probably meaning OraSure was too small for a small-cap index.

OraSure’s market capitalization early Tuesday was $318.4 million. The definition of “small cap” varies, but a company should be at or near $1 billion in market capitalization (current share price times number of shares outstanding) to qualify.

In the three months ending June 30, COVID revenue was almost $19 million, and everything else — the company calls it “core revenue” — was $35.4 million.

The decline will continue. OraSure forecasts third-quarter revenue of $37 million to $41 million, with just $1 million to $2 million from InteliSwab, its home COVID test.

On a conference call Aug. 6, company officials discussed patents and initiatives, and threw in the term “strategic transformation.”

Consider that: “strategic transformation.” What does it mean? Well, I don’t know, but I do know that I am wary of jargon.

What is strategic about it? That word is often tossed in to make something sound good.

Why is there a transformation? If one is needed, are things bad now?

I invest in stocks, and when something is trading under $10, I’m wary. OraSure hasn’t traded above $10 for a few yers.

Perhaps OraSure’s new factory and “strategic transformation” will bring it back. What started as SolarCare, making sunscreen towelettes in the 1980s, has come a long way.

Still, what is next?