Why GeneDx Holdings Stock Blasted 8% Higher Today

Key Points

• The company obliterated the consensus analyst estimates for its second quarter.

• Its double-digit growth rates were fueled by sales of exome and genome testing services.

• 10 stocks we like better than GeneDx ›

The stock of genetic testing company GeneDx Holdings (NASDAQ: WGS) was quite the hot item on the second trading day of the week. After the company published an encouraging second-quarter earnings report, investors piled into its shares to boost them to a more than 8% gain. That looked especially good next to the 0.3% slump of the benchmark S&P 500 index.

Nearly 50% top-line growth in the second quarter

That earnings report, unveiled well before market open that day, revealed that GeneDx booked nearly $103 million in revenue. That was 49% higher year over year and was helped greatly by a 69% improvement in the sales of exome and genome testing services, which hit a total volume of 23,102.

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Better, the company flipped to a bottom-line profit from the year-ago loss. Its non-generally accepted accounting principles, or non-GAAP (adjusted), net income was just under $15 million for the period, comparing most favorably to the over $2 million loss it suffered in the second quarter of 2024. On a per-share basis, GeneDx earned $0.50 in the period.

Both headline figures landed well above the consensus analyst estimates. On average, pundits tracking the company's stock were expecting only $85 million and some change in revenue and a far lighter adjusted net income figure of $0.12 per share.

Raised hopes

Compounding those solid growth rates, GeneDx raised certain guidance items for the entirety of 2025. The company now believes its revenue will be $400 million to $415 million, significantly higher than the previous estimate of $360 million to $375 million. Much of this will be thanks to exome and genome revenue, now expected to come in at 48% to 52% over the 2024 numbers. Formerly, the projection was 30%.

GeneDx left its adjusted net income growth rate guidance unchanged. The company remains vague about this, predicting only that the metric will be a positive number in each quarter and for the year as a whole.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.