GeneDx Holdings: Strong Recovery and Market Expansion Expected Despite Initial Setbacks

Jefferies analyst Tycho Peterson maintained a Buy rating on GeneDx Holdings (WGS – Research Report) on May 14 and set a price target of $80.00.

Tycho Peterson has given his Buy rating due to a combination of factors that suggest potential growth and opportunity for GeneDx Holdings. Despite the initial concerns regarding the company’s first-quarter performance, which saw a decline in volumes and average selling prices, there is optimism about the company’s ability to recover and grow in the second half of the year. The anticipated volume ramp in the latter half of the year, expected to exceed 35% growth, is a key factor in the positive outlook, as it suggests a strong recovery and expansion in their market presence.
Moreover, while there are competitive threats in the market, GeneDx’s strong foundation in its database, diagnostic yields, and customer service provides a significant competitive moat. The insider selling by executives, although perceived negatively, is explained by pre-planned sales and does not diminish management’s commitment to increasing shareholder value. Overall, the lack of pushback on aspects like average selling prices, cost of goods sold, and commercial execution further supports the Buy rating, indicating confidence in the company’s strategic direction and operational capabilities.

In another report released on May 15, Guggenheim also initiated coverage with a Buy rating on the stock with a $88.00 price target.

Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of WGS in relation to earlier this year.