Why We No Longer Like Personalis Stock

As our tech investing methodology evolves, new rules help us better avoid risks and pitfalls by choosing companies that have proven their potential. Meaningful revenue of $10 million per year or more demonstrates traction, provided it’s not in the form of government grants. The larger the company, the more likely they’ll be able to raise capital with favorable terms and enjoy economic benefits that come with size, like economies of scale. We’ve drawn a line in the sand at $1 billion. If a company doesn’t have a market cap of $1 billion, it shouldn’t be on our radar. So why is Personalis (PSNL) listed in our tech stock report as a like when it’s valued at just $225 million?

The last time we looked at Personalis was nearly two years ago in a piece titled A Pure-Play Stock for Investing in Cancer Genomics. At that time, we weren’t overly keen on more than half the company’s revenues coming from a single government program – the U.S. Department of Veterans Affairs Million Veteran Program (VA MVP). Today, we want to see if that situation has changed and evaluate the company’s ability to survive in the face of today’s bear market.

Revisiting Personalis Stock

The core offering from Personalis i