Why GeneDx Holdings Stock Just Dropped 16.6%
Key Points
GeneDx lowered its 2026 exome and genome volume growth target to at least 28% after third-quarter testing volume fell short of expectations.
Sales rose 5% to $123.1 million, in line with estimates, but the 32,134 exome and genome results were up 25% against the 29.2% or more the company had promised.
With two downward growth revisions already this year, investors appear to be pricing in a third.
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GeneDx Holdings (NASDAQ:WGS) stock fell 16.6% on Tuesday, Nov. 10, after the biotech company lowered its growth targets for the year.
The S&P 500 and the Nasdaq Composite dropped 0.4% and 0.7%, respectively.
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GeneDx earnings: revenue meets expectations, volume falls short
The genetic testing company GeneDx reported Q3 results on Monday after the bell. Sales jumped 5% to $123.1 million -- in line with what Wall Street was looking for -- and margins improved slightly. Unfortunately, testing volume lagged expectations. The company delivered 32,134 exome and genome results -- the DNA tests that are its core business -- up 25%. The company had promised 29.2% or more.
Management says that certain upfront paperwork is screening out some lower-value orders in favor of ones that pay better. The company kept its revenue forecast intact but cut its volume growth target to a minimum of 28%.
Image source: Getty Images.
Why GeneDx stock is priced on growth
This is a good example of why expectations are everything in the stock market. The company is still growing, but not as quickly as expected. With two downward growth revisions this year now, I understand why investors are pricing in a third.
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Johnny Rice 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.
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