On Wednesday, BTIG has maintained its positive stance on Neogenomics (NASDAQ: NEO), reiterating a Buy rating and a price target of $21.00. The firm's analyst highlighted Neogenomics' strong performance in the third quarter, with the company's core clinical services business growing by 14% year-over-year. This growth was attributed to a 9% increase in volume and a 5% rise in price.
Neogenomics has confirmed its revenue growth forecast for 2024, anticipating an 11-13% year-over-year increase. Additionally, the company has raised its 2024 Adjusted EBITDA guidance. A significant contributor to Neogenomics' growth is its Next (LON:NXT) Generation Sequencing (NGS) services, which now account for 31% of the clinical revenue.
The company is preparing to introduce its NEO Pan Tracer liquid biopsy blood test panel in the first half of 2025, which is expected to further contribute to its growth. Moreover, Neogenomics' RaDaR 2.0 is on track to receive CLIA validation within the same timeframe, although revenues from this minimal residual disease (MRD) testing are not anticipated to be included in the 2025 guidance expected to be issued around February.
BTIG's analyst expressed confidence in Neogenomics' potential for profitable growth in the upcoming years, supporting the firm's decision to reiterate the Buy rating and $21 price target.
In other recent news, NeoGenomics (NASDAQ:NEO), a prominent player in cancer-focused genetic testing services, has reported strong financial results in its third-quarter earnings call. The company's total revenues rose by 10% to $168 million, primarily driven by a 14% increase in clinical services revenue and a substantial 305% surge in adjusted EBITDA, which amounted to $13 million. This marks the fifth consecutive quarter of positive adjusted EBITDA for NeoGenomics, with Next Generation Sequencing (NGS) revenue growing by 26% and accounting for 31% of total clinical volume.
The company is also gearing up for the launch of several new tests and a digital platform, NEO Helix, aimed at enhancing customer experience. Among the planned launches are NEO PanTracer, a liquid biopsy test, and NEO AML Express, a rapid AML test, expected in early 2025.
Despite a 10% decline in ADX revenue in Q3 due to international site closures and restructuring, and increased operating expenses, the company remains optimistic about future growth. With $388 million in cash and marketable securities, NeoGenomics plans to retire $201 million in convertible notes due in May 2025. The company is also exploring strategic acquisitions to enhance market reach and capabilities, particularly in new NGS modalities.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Neogenomics' financial performance and market position. The company's market capitalization stands at $1.96 billion, reflecting its significant presence in the genomic testing sector. Despite the positive outlook from BTIG, it's worth noting that Neogenomics has not been profitable over the last twelve months, with a negative P/E ratio of -27.25.
However, aligning with BTIG's optimistic view, InvestingPro Tips suggest that net income is expected to grow this year, and analysts predict the company will be profitable this year. This expectation of profitability supports BTIG's confidence in Neogenomics' potential for profitable growth in the coming years.
The company's revenue growth remains strong, with a 12.06% increase over the last twelve months, reaching $644.12 million. This growth trend aligns with Neogenomics' confirmed revenue growth forecast for 2024 mentioned in the article.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 6 additional InvestingPro Tips available for Neogenomics, providing a deeper understanding of the company's financial health and market position.
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