NeoGenomics initiated with a Neutral at Guggenheim on premium valuation

As previously reported, Guggenheim initiated coverage of NeoGenomics (NEO) with a Neutral rating and no price target The firm believes NeoGenomics has done a “great job” gaining share and driving volumes while expanding margin in the challenging area of diagnostics. However, while there is still potential, the firm believes the reality of coupling this base with higher growth and higher average selling price outpatient tests in order to drive margins and cash flow higher has “become more difficult than NEO likely anticipated” and views the potential as “more than captured in the relative premium valuations.”