On Tuesday, BTIG raised the price target for GeneDx (NASDAQ: WGS) to $19.00, up from the previous target of $15.00, while reaffirming a Buy rating on the stock.
This adjustment follows a significant post-market surge in the company's shares, which climbed 30% after-hours. Prior to the first-quarter earnings announcement, the stock had already seen a substantial year-to-date increase of 300%.
The company has reported what is considered its strongest quarter to date, outperforming expectations with a revenue beat of 24 percentage points. GeneDx's first-quarter success was driven by a remarkable year-over-year growth of 91% in whole exome and genome test volumes. Additionally, the company's adjusted gross margins (Adj. GMs) were notably higher than anticipated, reaching 61%, which notably exceeded the forecast of 45%.
In light of these results, GeneDx has updated its financial outlook, raising its revenue and gross margin guidance for 2024 and setting a new target for reduced cash burn. These updates point to a clearer path toward profitability by 2025, as observed by BTIG and potentially other market watchers.
The firm's decision to maintain a Buy rating and increase the price target to $19 reflects confidence in GeneDx's performance and prospects following a quarter of robust financial results.
GeneDx stock is up over 22% in premarket trading Tuesday.
InvestingPro Insights
GeneDx's impressive first-quarter performance and BTIG's subsequent price target raise to $19.00 underscore the company's current market momentum. InvestingPro data highlights that despite a recent PRONEWS24 downturn in stock price over the last week, with a 1-week total return of -8.33%, the company has experienced a strong return over the last three months, with a total return of 185.71%. This volatility is echoed in the company's P/E ratio, which stands at -1.54, indicating that the market has high expectations for future earnings growth despite the lack of current profitability.
Further supporting the positive outlook, GeneDx's liquid assets exceed its short-term obligations, which aligns with the company's updated target for reduced cash burn. However, analysts are cautious about the company's profitability in the short term, as they do not anticipate GeneDx will be profitable this year. With a market cap of 286.59M USD and a revenue growth of -13.69% over the last twelve months as of Q4 2023, the company's financial health will be closely watched in the coming quarters.
For those interested in a deeper analysis, InvestingPro provides additional insights on GeneDx. There are 11 more InvestingPro Tips available, which could offer further guidance on the stock's future movements. To gain access to these valuable tips, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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