Market Shocker: NeoGenomics Stock Soars on Strong 2025 Outlook
Cancer Diagnostics Company Defies Expectations
NeoGenomics, a leading provider of cancer diagnostics and pharma services, stunned investors on Wednesday with a robust 2025 outlook, sending its stock soaring over 8% to $14.93. This remarkable turnaround came just a day after a shocking 14.5% decline following the surprise retirement announcement of CEO Chris Smith.
Beating Forecasts Across the Board
The company’s impressive guidance includes sales growth of 11% to 13% this year, reaching $735 million to $745 million, comfortably surpassing analysts’ expectations of $728 million. Moreover, NeoGenomics anticipates adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $55 million to $58 million, exceeding forecasts of $54.5 million. This represents a significant 43% to 51% increase from the company’s 2024 guidance.
Next-Generation Sequencing Testing Drives Growth
The sales guidance for 2025 includes a substantial 25% growth contribution from next-generation sequencing testing, a cutting-edge technology for reading a patient’s DNA. Notably, this growth does not rely on Radar, NeoGenomics’ platform for screening patients for recurring cancer.
Long-Term Ambitions
Looking ahead, NeoGenomics expects to achieve 12% to 13% annual sales growth, gross margin expansion of 100 to 150 basis points per year, and adjusted EBITDA improvement of 250 to 300 basis points each year. The company also aims to generate positive cash flow from operations in 2025 and serve over 1 million patients annually by 2028.
Analysts Weigh In
Needham analyst Ami Fadia maintained her buy rating on NeoGenomics stock, citing the company’s strong position despite the CEO’s retirement. William Blair analyst Andrew Brackmann echoed this sentiment, stating that the 2025 guidance and long-term targets alleviate concerns about underlying momentum and financial performance.
New Partnership with Adaptive Biotechnologies
In a separate development, NeoGenomics and Adaptive Biotechnologies announced a multiyear deal to cross-promote Adaptive’s test for recurring blood cancers with NeoGenomics’ hematopathology services. This strategic partnership is expected to drive growth for both companies.
Investor Confidence Boosted
NeoGenomics’ stock has been upgraded to an IBD Relative Strength Rating of 83, reflecting its rising price performance. With its strong 2025 outlook and long-term ambitions, the company is poised to continue its upward trajectory, instilling confidence in investors.
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