Group 1 - GeneDx Holdings Corp. has a Zacks Rank 1 with a 12.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - GeneDx's shares increased by 8.2% over the last three months, while the S&P 500 declined by 6.5% [1] - Eagle Bancorp Montana, Inc. also holds a Zacks Rank 1, with a nearly 9% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] Group 2 - Eagle Bancorp's shares gained 16.6% over the last three months compared to the S&P 500's decline of 6.5% [2] - Capital Bancorp, Inc. has a Zacks Rank 1, with a 7.2% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - Capital's shares increased by 6.8% over the last six months, while the S&P 500 declined by 4% [3] Group 3 - All three companies mentioned possess strong momentum characteristics, with GeneDx and Eagle Bancorp having a Momentum Score of A, while Capital Bancorp has a Momentum Score of B [1][2][3]

With a nearly 39% stock price decline this week, according to data compiled by S&P Global Market Intelligence, GeneDx Holdings (WGS 7.80%) was deep in the doghouse with investors. They traded out of the stock following the company's latest earnings release and a subsequent round of analyst price target cuts.A victim of high expectationsWhat's interesting about GeneDx's tumble is that its first-quarter performance was, on the surface, rather good. The figures released Wednesday revealed the DNA testing compa ...

Shares of GeneDx Holdings (WGS -38.27%) were plunging 42.9% as of 11:21 a.m. ET on Wednesday. The steep decline came after the genetic diagnostics company announced its 2025 first-quarter earnings before the market opened.GeneDx reported Q1 revenue of $87.1 million, up 42% year over year. This result was well above the consensus Wall Street forecast of $79.5 million. What about GeneDx's bottom line? The company posted a Q1 net loss of $6.5 million based on generally accepted accounting principles (GAAP). Ho ...

Company Performance - GeneDx Holdings Corp. reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and a significant improvement from a loss of $0.33 per share a year ago, representing an earnings surprise of 154.55% [1] - The company achieved revenues of $87.12 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 9.03%, and showing an increase from $62.42 million in the same quarter last year [2] - Over the last four quarters, GeneDx Holdings has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - GeneDx Holdings shares have increased approximately 52.2% since the beginning of the year, contrasting with a decline of -5.5% in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $86.8 million, and for the current fiscal year, it is $0.97 on revenues of $359.7 million [7] Industry Outlook - The Medical Services industry, to which GeneDx Holdings belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

GeneDx (WGS) Q1 2025 Earnings Call April 30, 2025 08:30 AM ET Company Participants Sabrina Dunbar - Director of IR & CommunicationsKatherine Stueland - President & CEOKevin Feeley - Chief Financial OfficerTycho Peterson - Managing DirectorBrandon Couillard - Managing Director Conference Call Participants Bill Bonello - Senior Research AnalystDan Brennan - AnalystMark Massaro - Managing Director - Senior Equity Research AnalystMatthew Sykes - Analyst Operator Good day and thank you for standing by. Welcome t ...

Financial Data and Key Metrics Changes - The company reported revenues of $87.1 million for Q1 2025, marking a 62% year-over-year growth in Exome and Genome revenues, which contributed $71.4 million this quarter [16][22] - Adjusted gross profit from continuing operations was $59.7 million, up 56% year-over-year, resulting in an adjusted gross margin of 69%, an increase from 61% a year ago [21][22] - Adjusted net income for Q1 2025 was $7.7 million, representing the third consecutive quarter of profitability [22] Business Line Data and Key Metrics Changes - Exome and Genome tests accounted for 40% of all tests in Q1, with volumes from these flagship products up 24% year-over-year [16] - The company launched its ultra-rapid genome sequencing product, which delivers results in as soon as 48 hours, enhancing its service offerings [10][19] Market Data and Key Metrics Changes - The company grew its market penetration of pediatric neurologists to 14% [9] - Average reimbursement rate for Exome and Genome tests increased to approximately $3,400, up from $2,600 in the same quarter last year [20] Company Strategy and Development Direction - The company is focused on integrating exome and genome testing as a standard of care, aiming to shift from reactive to proactive healthcare [7][8] - Plans to acquire Fabric Genomics, which will enhance AI-powered genomic interpretation and create a recurring software-based revenue stream [12][13] - The company is expanding into new clinical indications and markets, including NICU and adult testing, to capture growth opportunities [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strategic fit of the Fabric acquisition and its potential to unlock scalable platform economics [13] - The company anticipates continued growth in its core exome and genome testing business, with a guidance increase for total revenues to between $360 million and $375 million for the full year 2025 [23][25] Other Important Information - The company highlighted the importance of newborn screening and its potential revenue contribution, expected to materialize around 2027 [46] - Management noted that only 5% of rare diseases currently have approved therapies, emphasizing the critical role of genomic data in drug discovery [14] Q&A Session Summary Question: What are the reasons for the sequential decline in volumes in Q1? - Management acknowledged a historical pattern of volume decline from Q4 to Q1, exacerbated by weather disruptions and fewer sales days in Q1 [30][31] Question: What contributed to the increase in G&A expenses? - A significant portion of the increase was attributed to costs related to the Epic integration and general support costs, with expectations of driving down OpEx as a percentage of revenue over time [34][35] Question: What visibility supports the expected acceleration in NICU volumes in the second half of the year? - Management indicated that initial integration with Epic is on track and that there is a solid pipeline of clients ready to come online [38] Question: How is pricing expected to play out in Q2 and beyond? - Management noted that the average reimbursement rate is expected to remain stable, with ongoing efforts to reduce denials and improve the revenue cycle [40][43] Question: What is the expected impact of the weather disruptions on Q2 volumes? - Management expects to recoup some of the missed appointments in Q2, although long wait times for specialist appointments may affect recovery [90] Question: What are the expectations for new indications this year? - Management confirmed that new indications, including immune deficiencies and cerebral palsy, are expected to contribute to growth, although it is too early to quantify their impact [63][65]

Financial Performance - GeneDx grew revenues to $87.1 million, a 42% increase year-over-year[4] - Exome and genome test revenue grew to $71.4 million, a 62% increase year-over-year, representing 40% of all test results[4,9] - The company delivered an adjusted gross margin of 69%, up from 61% in the first quarter of 2024[4] - Adjusted net income for the first quarter of 2025 was $7.7 million[4,13] - Cash, cash equivalents, marketable securities, and restricted cash totaled $160.2 million as of March 31, 2025[13] Guidance and Acquisition - Full year 2025 revenue is projected to be between $360 million and $375 million, including $3 million to $5 million from the Fabric Genomics acquisition[5] - Exome/genome volume and revenue growth is expected to be at least 30%[5] - Adjusted gross margins are projected to be between 66% and 68%[5] - GeneDx announced plans to acquire Fabric Genomics, with the deal expected to close in Q2 2025, for an upfront purchase price of $33 million, potentially reaching $51 million in total consideration[4,30] Market and Strategy - GeneDx has contracted with 80% of covered lives, including all large national commercial payers[58,65,82] - The company estimates a $45 billion total market opportunity for exome/genome use cases, with $25 billion in pediatrics and rare diseases and $20 billion in adult applications[56] - GeneDx has screened 17,000 healthy infants with genome sequencing in the GUARDIAN study, with a goal of >100,000[80]

Financial Performance - Total revenue for Q1 2025 was $87.115 million, a 39.7% increase from $62.422 million in Q1 2024[15] - Diagnostic test revenue reached $85.759 million, up 40.4% from $61.104 million year-over-year[15] - Gross profit for Q1 2025 was $58.476 million, compared to $37.411 million in Q1 2024, reflecting a gross margin improvement[15] - The net loss for Q1 2025 was $6.529 million, significantly reduced from a net loss of $20.239 million in Q1 2024[15] - Revenue from patients with third-party insurance was $68.059 million for the three months ended March 31, 2025, up from $43.839 million in the same period of 2024, reflecting a growth of about 55.2%[39] - Revenue for the GeneDx segment was $87.1 million for the three months ended March 31, 2025, an increase from $62.4 million in the same period of 2024, reflecting a growth of approximately 39.6%[109] - For the three months ended March 31, 2025, the net loss attributable to common stockholders was $6.5 million, compared to a net loss of $20.2 million for the same period in 2024, resulting in a basic and diluted loss per share of $0.23, down from $0.78[104] Assets and Liabilities - Cash and cash equivalents increased to $99.704 million as of March 31, 2025, up from $85.212 million at the end of 2024[14] - Total assets grew to $446.430 million, an increase from $419.380 million at the end of 2024[14] - The company recorded a total financial liability of $4.619 million as of March 31, 2025, compared to $3.519 million as of December 31, 2024, indicating an increase of approximately 31.4%[47] - The Company reported total liabilities of $41.9 million as of March 31, 2025, compared to $30.0 million as of December 31, 2024, reflecting an increase of approximately 39.6%[106] Operational Performance - The company reported a loss from operations of $4.551 million for Q1 2025, an improvement from a loss of $13.660 million in Q1 2024[15] - Research and development expenses were $12.577 million, compared to $11.567 million in the same period last year[15] - The company has established liabilities of $14.0 million and $12.6 million for potential recoupments of payments as of March 31, 2025, and December 31, 2024, respectively[46] Strategic Initiatives - The company plans to pursue a new strategic direction and expects to scale to profitability[12] - GeneDx is in the process of acquiring Fabric Genomics, which is expected to enhance its service offerings[12] - The Company entered into a merger agreement to acquire Fabric Genomics for approximately $33.0 million in cash, with potential milestone payments totaling up to $18.0 million based on revenue performance[112] Stock and Compensation - Stock-based compensation expense for the three months ended March 31, 2025, totaled $3,983 million, compared to a reversal of $451 million in the same period of 2024[86] - The Company granted 460,439 restricted stock units during the three months ended March 31, 2025, with a weighted-average grant-date fair value of $94.22[95] - Unrecognized stock-based compensation expense related to the Company's restricted stock units was $48.0 million as of March 31, 2025[97] Debt and Financing - The Company entered into the Perceptive Term Loan Facility on October 27, 2023, with an initial tranche of $50 million funded and an additional tranche of $25 million available until December 31, 2024[68] - The Perceptive Term Loan Facility has a maturity date of October 27, 2028, with an interest rate of Term SOFR plus an applicable margin of 7.5%[70] - The Company made principal payments totaling $0.3 million during the three months ended March 31, 2025, with an outstanding loan balance of $5.5 million from the DECD Loan Agreement[77] Tax and Regulatory Matters - The effective tax rate for the three months ended March 31, 2025, was (1.2)%, compared to 0.4% for the same period in 2024, primarily due to changes in valuation allowances related to deferred tax assets[102] - The company plans to adopt ASU 2023-09 regarding income tax disclosures in its Annual Report for the year ended December 31, 2025, without expecting a material impact on its consolidated financial statements[36] - The company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements, which requires additional disclosures about specific expense categories[38]

Revenue Growth - First quarter 2025 revenues reached $87.1 million, reflecting a 42% year-over-year increase[5] - Exome and genome test revenue grew to $71.4 million, marking a 62% year-over-year growth[5] - Total revenue for the three months ended March 31, 2025, reached $87,115,000, compared to $62,422,000 in the prior year, marking a year-over-year increase of 39.6%[26] - Diagnostic test revenue for the three months ended March 31, 2025, was $85,759,000, an increase from $61,104,000 in the same period of 2024, representing a growth of 40.3%[26] Profitability and Loss - Adjusted net income for the first quarter 2025 was $7.7 million, compared to an adjusted net loss of $8.0 million in the same quarter of 2024[6] - The net loss for the three months ended March 31, 2025, was $6,529,000, a significant reduction from a net loss of $20,239,000 in the prior year, indicating a decrease in losses by 67.7%[26] - The company reported a loss from operations of $4,551,000 for the three months ended March 31, 2025, a significant improvement from a loss of $13,660,000 in the same period of 2024[26] Margin Improvement - Adjusted gross margin improved to 69% in Q1 2025, up from 61% in Q1 2024[5] - The gross margin improved to 67.1% for the three months ended March 31, 2025, compared to 59.9% in the same period of 2024[26] Expenses - Research and development expenses for the three months ended March 31, 2025, were $12,577,000, compared to $11,567,000 in 2024, representing an increase of 8.7%[26] - Selling and marketing expenses increased to $18,316,000 for the three months ended March 31, 2025, from $16,085,000 in the same period of 2024, a rise of 13.8%[26] - General and administrative expenses rose to $32,134,000 for the three months ended March 31, 2025, compared to $23,419,000 in 2024, reflecting an increase of 37.1%[26] Cash Position - Cash position as of March 31, 2025, was $160.2 million, including $4.1 million generated from ordinary operations[10] - Cash and cash equivalents increased to $99,704,000 as of March 31, 2025, up from $85,212,000 at the end of December 2024, indicating a growth of 17.0%[24] - Cash, cash equivalents, and restricted cash at the end of the period totaled $100.694 million, up from $84.660 million at the end of March 2024[28] Strategic Initiatives - GeneDx plans to acquire Fabric Genomics, expected to contribute $3 to $5 million in post-close revenue[10] - GeneDx launched ultraRapid Whole Genome Sequencing, providing genomic insights in as soon as 48 hours for neonatal and pediatric patients[10] - The company expanded its commercial footprint with new indications for cerebral palsy and Inborn Errors of Immunity, enhancing access to genomic testing[10] Investment and Financing - The company invested $6.129 million in property and equipment, compared to $443,000 in the same period last year[28] - Proceeds from offerings, net of issuance costs, amounted to $13.894 million, with no such proceeds reported in the same quarter of 2024[28] - Cash paid for interest decreased to $1.600 million from $2.019 million year-over-year[28] Cash Flow - Net cash provided by operating activities was $10.182 million, compared to a net cash used of $16.413 million in the prior year[28] - The company had a net cash used in investing activities of $9.408 million, contrasting with a net cash provided of $843,000 in the prior year[28] - The change in accounts receivable was a negative $8.557 million, indicating a decrease in cash flow from sales[28]

Core Viewpoint - GeneDx Holdings Corp. has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is a significant factor influencing stock prices [2][4]. - A strong correlation exists between earnings estimate revisions and near-term stock movements, making the Zacks rating system valuable for investors [6]. Company Performance Indicators - For GeneDx Holdings, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. - The Zacks Consensus Estimate for GeneDx Holdings indicates expected earnings of $0.97 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 288% [8]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [10].