Yahoo Finance GeneDx Holdings Corp. (NASDAQ:WGS) Just Reported First-Quarter Earnings And Analysts Are Lifting Their Estimates
GeneDx Holdings Corp. (NASDAQ:WGS) investors will be delighted, with the company turning in some strong numbers with its latest results. The results were impressive, with revenues of US$62m exceeding analyst forecasts by 26%, and statutory losses of US$0.78 were likewise much smaller than the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for GeneDx Holdings
After the latest results, the four analysts covering GeneDx Holdings are now predicting revenues of US$242.7m in 2024. If met, this would reflect a solid 9.4% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 44% to US$2.87. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$225.8m and losses of US$4.89 per share in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable decrease in loss per share in particular.
It will come as no surprise to learn thatthe analysts have increased their price target for GeneDx Holdings 34% to US$15.25on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic GeneDx Holdings analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$5.50. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that GeneDx Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.1% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GeneDx Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for GeneDx Holdings going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for GeneDx Holdings (1 doesn't sit too well with us) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
