GeneDx Holdings (WGS), a leading genetic testing company, sent its stock soaring over 46% on Tuesday following the release of its impressive third-quarter earnings report. The company exceeded analysts’ expectations on both the top and bottom lines, signaling a strong performance fueled by robust growth in its core business.
GeneDx reported a third-quarter EPS loss of $(0.31), a significant improvement compared to the $(1.64) loss reported a year ago. This outperformance surpassed the consensus loss of $(0.50), indicating a positive shift in the company’s financial trajectory. The company’s revenue also demonstrated impressive growth, reaching $76.87 million, a 44% increase year-over-year. This figure comfortably surpassed the consensus estimate of $64.99 million, highlighting the strong demand for GeneDx’s services.
The key driver of this remarkable performance was the surge in exome and genome test revenue. This segment saw revenue grow to $60.0 million, representing a 77% year-over-year increase and an 18% sequential jump. The number of exome and genome tests conducted also rose significantly, reaching 19,262, a 46% year-over-year and 7% sequential increase. These figures underscore the growing importance of comprehensive genetic testing in healthcare and the increasing trust in GeneDx’s expertise.
GeneDx’s profitability also saw notable improvements. Adjusted gross margin expanded to 64%, a substantial increase from 48% a year ago. This signifies a positive trend in the company’s ability to manage costs effectively while delivering high-quality services. The company also achieved positive adjusted net income, reaching $1.2 million, a 106% year-over-year improvement and a 143% sequential increase. This milestone demonstrates GeneDx’s ability to generate profits despite the competitive landscape in the genetic testing industry.
Looking ahead, GeneDx has set ambitious goals for 2024. The company anticipates revenues to range between $284 million and $290 million, surpassing its previous guidance of $255 million to $265 million and exceeding the consensus estimate of $263.37 million. This optimistic outlook underscores the company’s confidence in its continued growth trajectory and its ability to capitalize on the expanding market for genetic testing services.
The robust performance and positive outlook have clearly resonated with investors, driving the WGS stock price up 46.8% to $82.28 at last check on Tuesday. The market’s reaction highlights the confidence investors have in GeneDx’s future prospects and its ability to capitalize on the growing demand for genetic testing in healthcare.
