Investing.com -- Shares of NeoGenomics, Inc. (NASDAQ: NASDAQ:NEO) rose 8% after the company provided an optimistic financial guidance for 2025 and updated its Long-Range Financial Plan. The announcement, made during the 43rd Annual J.P. Morgan Healthcare Conference on Wednesday, outlined expectations for annual revenue growth of 12-13% and improvements in adjusted EBITDA.
NeoGenomics anticipates total revenues to be between $735 million and $745 million for the fiscal year 2025, representing an 11% to 13% increase from the previous year's midpoint guidance of $661 million. The company also expects a significant jump in adjusted EBITDA, forecasting a range of $55 million to $58 million, which translates to an impressive 43% to 51% growth from the FY 2024 guidance of $38.5 million.
The company's Long-Range Plan, building on the success of the past three years, includes key targets such as gross margin expansion of 100-150 basis points (bps) per year, adjusted EBITDA improvement of 250-300 bps per year, and positive cash flow from operations in 2025 onwards. NeoGenomics also aims to serve over 1 million patients annually by 2028.
TD Cowen analyst Dan Brennan commented on the updated guidance, stating, "This AM, NEO updated 2025 revenue and EBITDA guidance, +2%/+4% ahead of Street, as well as raising the LT revenue guide ~250bps at the midpoint, to 12-13% from 10%+ (both ex-MRD), while giving more concrete targets on annual GM/EBITDA improvements (with EBITDA margins > Cons). Net, 2 pieces of positive news which look particularly positive in light of the sharp stock decline post the CEO news."
Brennan's analysis underscores the significance of the updated guidance, especially considering the recent CEO-related stock price drop. The company's focus on revenue growth, particularly in Next (LON:NXT) Generation Sequencing (NGS), and margin improvements, along with its strong cash position to retire 2025 convertible notes, paints a confident picture for investors.
The announcement has been well-received by the market, as evidenced by the stock's positive movement, reflecting investor confidence in NeoGenomics' strategic plan and financial targets for the coming years.
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