GeneDx Holdings (WGS) AI Stock Analysis

• Market Cap: $2.68B
• Dividend Yield: N/A
• Average Volume (3M): 757.49K
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.50
• Revenue Growth: 50.79%
• EPS Growth: 73.57%
• Country: US
• Employees: 1,000
• Sector: Healthcare
• Sector Strength: 66
• Industry: Medical - Healthcare Information Services
• EPS (TTM): -1.99
• Shares Outstanding: 28,068,274
• 10 Day Avg. Volume: 898,019
• 30 Day Avg. Volume: 757,486
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.59
• Price to Cash Flow (P/CF): -230.10
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $113.17
• Price Target Upside: 18.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

GeneDx Holdings has strong revenue growth and improving margins, but operational challenges remain due to persistent losses and negative cash flows. The stock is currently seeing positive momentum in the market, but its valuation is poor due to negative earnings. Strategic changes and strong guidance from the earnings call are positive, yet high denial rates and exiting a segment pose risks. Overall, the stock is moderately positioned with potential for future improvement.

Positive Factors

Financial Performance

WGS generated a strong fourth-quarter performance with revenue of $95M, which is a 64% year-over-year increase and a 24% quarter-over-quarter increase, beating expectations.

Growth Potential

With only about 5% of the total addressable market penetrated, earnings and free cash flow are inflecting, suggesting more growth potential.

Market Expansion

The expansion into the NICU market is seen as a new growth driver, with the potential for significant revenue from an estimated 200,000 tests opportunity.

Negative Factors

Allegations

A short report alleges wholesale reimbursement fraud at GeneDx, which led to a decrease in the company's shares.

GeneDx Holdings Business Overview & Revenue Model

Company Description

GeneDx Holdings Corp. is a patient centered health intelligence company. It engages in transforming healthcare by applying AI and machine learning to multidimensional, longitudinal clinical and genomic data to build dynamic models of human health and defining optimal, individualized health trajectories. The firm, through its Centrellis health intelligence platform, generates a more complete understanding of disease and wellness and provides science-driven solutions to the most pressing medical needs. The company was founded by Eric Schadt in October 2015 and is headquartered in Stamford, CT.

How the Company Makes Money

GeneDx Holdings primarily generates revenue through the provision of genomic testing services. The company charges healthcare providers, hospitals, and research institutions for conducting genetic tests. These tests include whole exome and genome sequencing, as well as targeted panels for specific genetic disorders. Additionally, GeneDx may partner with pharmaceutical companies for research and development projects, contributing another revenue stream. The company may also receive payments from healthcare insurance providers who cover the cost of genetic testing for their members. Furthermore, GeneDx's extensive database of genetic information can be monetized through collaborations with researchers and institutions seeking access to valuable genetic insights.

GeneDx Holdings Financial Statement Overview

Summary

GeneDx Holdings shows significant revenue growth and improved gross profit margins. However, persistent operating losses and negative cash flows highlight ongoing operational challenges. Balance sheet strength is moderate with a manageable debt profile.

Income Statement

GeneDx Holdings has shown a significant improvement in revenue from $202.57M to $305.45M, a growth rate of approximately 50.85%. Despite revenue growth, the company continues to operate at a loss, with a net loss of $52.29M. Margins remain negative, indicating challenges in cost management. The gross profit margin improved to 63.64%, suggesting better resource utilization. However, both EBIT and EBITDA margins are negative, reflecting ongoing operational inefficiencies.

Balance Sheet

The company has a moderate debt-to-equity ratio of 0.26, showing manageable leverage. Stockholders' equity increased to $245.25M, which strengthens the equity position. The equity ratio stands at 58.47%, indicating a solid proportion of equity financing. However, total assets have decreased, suggesting a contraction in the asset base.

Cash Flow

Operating cash flow remains negative at -$28.50M, indicating cash outflows from core operations. Free cash flow is also negative at -$33.99M, though it shows improvement from the previous year's -$185.86M. The free cash flow to net income ratio is less favorable due to continuous net losses, posing challenges in liquidity management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
305.45M	202.57M	234.69M	212.19M	179.32M
	Gross Profit
194.40M	60.62M	-26.75M	-16.60M	4.03M
	EBIT
-23.21M	-163.66M	-667.65M	-446.15M	-241.99M
	EBITDA
-23.21M	-136.46M	-398.20M	-219.19M	-224.73M
	Net Income Common Stockholders
-52.29M	-175.77M	-548.98M	-245.39M	-246.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
141.19M	130.15M	123.93M	400.57M	108.13M
	Total Assets
419.38M	473.67M	490.94M	554.09M	251.64M
	Total Debt
64.25M	119.77M	72.38M	32.85M	45.02M
	Net Debt
-20.96M	20.09M	-51.55M	-367.72M	-63.11M
	Total Liabilities
174.13M	245.66M	237.24M	165.99M	581.69M
	Stockholders Equity
245.25M	228.02M	253.71M	388.10M	-330.05M
Cash Flow		Free Cash Flow
-33.99M	-185.86M	-333.48M	-211.22M	-125.10M
	Operating Cash Flow
-28.50M	-180.15M	-319.15M	-190.43M	-93.13M
	Investing Cash Flow
-30.13M	-43.73M	-141.33M	-20.79M	-31.97M
	Financing Cash Flow
44.16M	186.24M	197.31M	493.73M	129.06M

GeneDx Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 95.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WGS, the sentiment is Positive. The current price of 95.47 is above the 20-day moving average (MA) of 93.18, above the 50-day MA of 91.84, and above the 200-day MA of 64.96, indicating a bullish trend. The MACD of 1.47 indicates Negative momentum. The RSI at 52.30 is Neutral, neither overbought nor oversold. The STOCH value of 85.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WGS.

GeneDx Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PGNY	78 Outperform	$1.84B	37.93	11.14%	―	7.22%	-9.84%
GDRX	65 Neutral	$1.72B	105.28	2.21%	―	5.61%	―
WGS	59 Neutral	$2.68B	38.75	-22.10%	―	50.79%	73.57%
Sector *	51 Neutral	$5.19B	3.12	-41.08%	2.95%	17.98%	2.02%
SDGR	50 Neutral	$1.88B	―	-38.58%	―	-4.21%	-544.81%
SOPH	48 Neutral	$189.13M	―	-50.41%	―	4.49%	22.49%
DH	47 Neutral	$385.29M	―	-63.28%	―	0.31%	-99.23%

GeneDx Holdings Corporate Events

GeneDx Holdings Expects Strong 2024 Financial Performance

GeneDx Holdings Corp. announced its preliminary, unaudited financial results for the fourth quarter and full year of 2024, indicating expectations to exceed its revenue guidance with at least $299 million for the year and $92 million for the fourth quarter. The company also anticipates a full year adjusted gross margin of at least 64% and 68% in the fourth quarter, highlighting strong execution and profitability milestones, including positive operational cash flow and adjusted net income, positioning itself as a standard-bearer in the use of genetics in healthcare.