On Monday, BTIG has increased the price target for GeneDx (NASDAQ:WGS) to $15.00, up from the previous target of $11.00, while maintaining a Buy rating on the stock. Following extensive investor meetings with the GeneDx management team, the firm's analysts are optimistic about the company's trajectory.
GeneDx's management, including CEO Katherine Stueland, CFO Kevin Feeley, and IR/commercial Sabrina Dunbar, spent two days with investors across three states. These meetings left analysts feeling positive about the company's current position in the market. Despite a significant year-to-date increase of over 250% in GeneDx's stock price, it is currently trading at approximately 0.8 times the 2025 revenue estimates, which is lower than the average of around 1.5 times for small cap peers.
The company's management has reaffirmed their confidence in reaching adjusted EBITDA profitability at some point in 2025. BTIG's revised price target of $15.00 is based on a conservative 2.0 times multiple applied to their 2025 revenue estimate of $255 million. This projection is discounted back two years at a 14% discount rate, taking into account an estimated share count of approximately 26 million.
GeneDx's stock performance has been notable, and with the stock trading below peer valuations, there is an anticipation that it may continue to rise through 2024 and into 2025. The new price target reflects this potential for growth and the company's steady progress toward profitability.
InvestingPro Insights
As GeneDx (NASDAQ:WGS) captures the attention of analysts and investors alike, real-time metrics and InvestingPro Tips offer further context to the company's financial landscape. With a market capitalization of approximately $251.16 million and a striking year-to-date price total return of 250.55%, the stock's performance is indeed noteworthy. Despite the optimism surrounding its trajectory, GeneDx currently operates at a loss, as underscored by a negative P/E ratio of -1.5 and an operating income margin of -83.95% for the last twelve months as of Q4 2023.
InvestingPro Tips highlight that GeneDx is rapidly burning through cash and is not anticipated to be profitable this year, aligning with the management's own expectations for reaching adjusted EBITDA profitability in 2025. Furthermore, the stock's price movements have been quite volatile, yet it has seen a large price uptick over the last six months, with a 202.19% return. The company's liquid assets do exceed short-term obligations, which could provide some financial flexibility in the near term.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available, which can be accessed through the dedicated page for GeneDx at https://www.investing.com/pro/WGS. And for those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking more tips and insights that could help inform investment decisions.
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