Roth/MKM launches coverage
Roth/MKM began coverage of Prenetics (NASDAQ: PRE) on Wednesday, assigning a Buy rating and establishing a $36.00 price target. The price objective equates to about a 75% upside when compared with the stated current share price of $20.51.
IM8 fuels the thesis
The research note points to IM8, a supplement brand that Prenetics introduced in late-2024, as the central rationale for the call. According to Roth/MKM, IM8 has rapidly scaled to more than $100 million in run-rate revenue and has become the exclusive operational focus for Prenetics’ management team. That pivot is reflected in the company’s recent top-line performance, with revenue expanding 201% over the last twelve months.
Profitability and past challenges
Despite the revenue acceleration, Prenetics was not profitable over the previous twelve months, posting an EPS of -$3.62. The research note indicates that analysts project the company will achieve profitability within the current year. The firm also notes that Prenetics faced headwinds after completing its business combination with SPAC Artisan Acquisition Corp. in 2022, but has since redirected its strategy around the IM8 brand.
Valuation approach and balance sheet
Roth/MKM’s $36.00 price target is derived from a multiple-based valuation - specifically 2.5 times Prenetics’ estimated 2026 revenue - and the firm’s model includes the company’s non-core assets in that assessment. The research team also emphasized that the market appears to undervalue both IM8’s future growth trajectory and Prenetics’ asset-rich balance sheet.
Implications for investors
For investors, the initiation frames Prenetics as a high-growth supplement play centered on IM8, offset by the recent history of unprofitability and the company’s reorientation following the 2022 SPAC transaction. The Buy rating and the stated valuation multiple provide a clear line of sight into Roth/MKM’s expectations for revenue expansion through 2026 and the role of non-core assets in the firm’s valuation assumptions.
Key takeaways
- Roth/MKM starts coverage of Prenetics with a Buy rating and a $36.00 target, implying roughly 75% upside from $20.51.
- IM8, launched in late-2024, has scaled to over $100 million in run-rate revenue and is now management’s main focus.
- Revenue grew 201% year-over-year, though the company reported an EPS of -$3.62 for the last twelve months; analysts expect profitability this year.
Note: The article reflects the information contained in the initiating research note and the company metrics cited therein.