PRPO · Precipio
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $31.12
Note written ·
Price against the kill line
28.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $31.12, on record since 11 November 2026. The shares are down 7.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $31.12, the highest close since 24 August 2026, would show the shares leading the S&P 500. A company announcement moving the over-$10 million product run-rate target earlier than the end of 2027 would also prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Health Care
Quarter to 30 September 2026, filed 10 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 7.3
- Revenue, change on a year (%)
- +8.3
- Gross margin (%)
- 46.1
- Operating margin (%)
- 0.0
- Free cash flow, four quarters ($M)
- 1.4
- Net cash, cash less debt ($M)
- 3.2
- Enterprise value to sales (×)
- 1.3
- Free-cash-flow yield (%)
- 3.5
All filed numbers
What Precipio reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 7.3 | +8.3 | 46.1 | 0.0 |
| first filed | 7.0 | +24.2 | 44.7 | −8.5 |
| first filed | 6.7 | +36.2 | 40.6 | −21.3 |
| first filed | 6.7 | +22.9 | 46.8 | 8.1 |
| first filed | 6.8 | +29.9 | 44.4 | −0.9 |
| first filed | 5.7 | +27.3 | 43.0 | −14.6 |
| Pre-tax income ($M) | 0.0 |
| Net income ($M) four quarters: −1.1 | 0.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +9.4 |
| Operating cash flow ($M) | 1.7 |
| Capital spending ($M) | 0.3 |
| Free cash flow ($M) | 1.4 |
| Cash and short-term investments ($M) | 3.6 |
| Debt ($M) | 0.3 |
| Net cash, cash less debt ($M) | 3.2 |
| Deferred revenue ($M) −65.9% on a year | 0.1 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 2.0 |
| Inventory ($M) | 0.9 |
| Shareholders' equity ($M) including non-controlling interests | 14.9 |
| Market value ($M) | 39.7 |
| Enterprise value, market value plus net debt ($M) | 36.4 |
| Enterprise value to sales (×) | 1.3 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 2.7 |
| Free-cash-flow yield (%) | 3.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.3% of shares outstanding sold short, 1.5 days of average trading to cover, −14.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $999 | $100K |
The thesis
Precipio's shares are more likely to lag the S&P 500 over the next three months. The third quarter showed steady growth. The shares had already jumped from $18.62 on 6 November 2026 to $24.80 on 11 November 2026, and the next scheduled results are the fourth-quarter figures, expected around March 2027. The rating is Low because revenue rose by about $0.3 million from the second quarter while adjusted earnings and operating cash flow did not improve.
Precipio reported third-quarter sales of $7.331 million, up from $6.767 million a year earlier, in results filed with the SEC on 10 November 2026. On the shareholder call that evening, CEO Ilan Danieli said product revenue passed $1 million in a quarter for the first time. He also set targets for annualized revenue run rates at the end of 2027: more than $10 million for products and about $30 million for pathology. Management said customer onboarding takes 3 to 18 months, so those targets will be tested over more than a year, not within one quarter.
Bullish and bearish views on Precipio, Inc.
The bull case on Precipio, Inc. (PRPO), in brief: product revenue passed $1 million. The bear case: sequential growth was small.
Bull case
- Product revenue passed $1 million. Danieli said on the 10 November 2026 call that third-quarter product revenue was about $1.0 million, up 40% year over year. The company had flagged this milestone in its 28 October 2026 Form 8-K.
- Cash is building without new shares. Cash ended the quarter above $3.5 million, up about $0.5 million in the quarter, according to the 10 November 2026 call. Danieli said the company turned down outside capital and expects operating cash flow to fund its 2027 plans.
- The 2027 targets imply large growth. On 10 November 2026, management targeted a combined annualized revenue run rate of more than $40 million by the end of 2027. It put the current product run rate at about $4 million and said the product target covers existing products only.
- Product margins have room to rise. Management said on the 10 November 2026 call that product gross margin is in the high 40s to about 50%. It expects the mid-60s if product revenue doubles and 70% to 75% at scale.
Bear case
- Sequential growth was small. Revenue rose from $7.021 million in the second quarter (10-Q for the period ended 30 June 2026) to $7.331 million in the third. Danieli put the increase at about $300,000: roughly $100,000 from products and $200,000 from pathology.
- Profit and cash flow did not grow. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) stayed at about $0.4 million in the third quarter, according to the 10 November 2026 call. Operating cash flow eased to about $0.6 million from about $0.7 million in the second quarter.
- Spending comes before revenue. Management plans to grow the product sales team from four representatives to at least eight during 2027, per the 10 November 2026 call. One analyst on the call asked why that spending is needed, given the company's existing distributor relationships.
- The rebound came before the results. The shares rose from $18.62 on 6 November 2026 to $22.20 on 9 November 2026, with no company announcement that day. They closed at $23.65 on 10 November 2026, before the evening call, and at $24.80 on 11 November 2026.
- No guidance for the fourth quarter. Management gave no fourth-quarter revenue guidance on 10 November 2026. It said one new customer goes live during the quarter.
Price setup
The shares closed at $24.80 on 11 November 2026. That is just under the 200-day moving average of $24.83 and above the 50-day average of $23.13, both from adjusted daily closes as of that date. The three-month price change is 6.9%, measured from a close of $23.21 on 13 August 2026.
The 52-week closing low is $17.79 on 2 November 2026. The 52-week intraday high is $33.63 on 6 May 2026, and the last close is 26.3% below it. The shares have recovered most of the October–November decline, and the 200-day average is the nearest level above. If closes hold above it, the rebound is extending. A return below the 50-day average would erase most of the gain made after the results.
The only recent SEC Form 4 filings report director stock grants on 15 October 2026 at $22.54: 582 shares to David Seth Cohen and 122 shares to Christina Rizopoulos Valauri. Neither is a purchase or a sale on the open market.
Catalysts ahead
- ~March 2027 (est.): Fourth-quarter and full-year 2026 results and shareholder update call. Shows whether product revenue keeps growing past $1 million a quarter as new customers go live, and whether adjusted EBITDA and operating cash flow rise above the third-quarter levels.
What would change the view
A daily close above $31.12, the highest close since 24 August 2026, would show the shares leading the S&P 500. A company announcement moving the over-$10 million product run-rate target earlier than the end of 2027 would also prove this call wrong.
What it trades with
Precipio is a micro-cap diagnostics company with quarterly revenue just over $7 million. Its shares move mainly on company news and on retail trading, not on any industry-wide driver. The jump on 9 November 2026, which came before the results and with no company announcement, shows how far the price can move on little new information. For a while, the targets set on 10 November 2026 and any announcements of customers going live are likely to matter more than broad healthcare or small-cap moves.
The evidence, claim by claim (7)
- Third-quarter 2026 sales of $7.331 million, up from $6.767 million in the third quarter of 2025. Precipio Q3 2026 results, 8-K and 10-Q filed 10 November 2026 · as of
- Third-quarter 2026 product revenue was about $1.0 million, the first quarter above $1 million, and pathology revenue was about $6.3 million. Precipio Q3 2026 shareholder call, 10 November 2026 · as of
- Third-quarter adjusted EBITDA was about $0.4 million, flat with the second quarter; operating cash flow was about $0.6 million against about $0.7 million in the second quarter. Precipio Q3 2026 shareholder call, 10 November 2026 · as of
- Cash ended the third quarter above $3.5 million, up about $0.5 million in the quarter; management said no outside capital was raised. Precipio Q3 2026 shareholder call, 10 November 2026 · as of
- Management targets end-2027 annualized revenue run rates of more than $10 million for products and about $30 million for pathology, against a current product run rate of about $4 million. Precipio Q3 2026 shareholder call, 10 November 2026 · as of
- Second-quarter 2026 revenue, net of contractual allowances and adjustments, was $7.021 million, against $5.629 million a year earlier. Precipio 10-Q for the period ended 30 June 2026 · as of
- Directors David Seth Cohen and Christina Rizopoulos Valauri received stock grants of 582 and 122 shares at $22.54 on 15 October 2026. SEC Form 4 filings dated 19 October 2026 · as of
Sources
- Precipio (PRPO) Q3 2026 Earnings Call Transcript · fool.com ·
- Earnings call transcript: Precipio shares rise on q3 2026 growth outlook · investing.com ·
- Precipio, Inc. - Form 10-Q - FY2026 · sec.gov
- Precipio, Inc. - Form 8-K - FY2026 · sec.gov ·
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