GeneDx Holdings Corp. (NASDAQ:WGS) Analysts Just Trimmed Their Revenue Forecasts By 11%
One thing we could say about the analysts on GeneDx Holdings Corp. (NASDAQ:WGS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the three analysts covering GeneDx Holdings are now predicting revenues of US$222m in 2024. If met, this would reflect an okay 7.6% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 80% to US$3.59. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$248m and losses of US$3.53 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.
View our latest analysis for GeneDx Holdings
The consensus price target fell 27% to US$7.25, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that GeneDx Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.1% growth on an annualised basis. This is compared to a historical growth rate of 7.7% over the past five years. Compare this to the 198 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.0% per year. So it's pretty clear that, while GeneDx Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of GeneDx Holdings going forwards.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with GeneDx Holdings' financials, such as a short cash runway. For more information, you can click here to discover this and the 3 other concerns we've identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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