GeneDx Holdings experienced a significant 39% decline in stock price this week, based on data from S&P Global Market Intelligence. This decline followed the release of the company’s latest earnings and subsequent reductions in analyst price targets, leading investors to move away from the stock.
Despite a seemingly strong performance in the first quarter, where GeneDx increased its revenue by 42% year-over-year to over $87 million, the company still faced challenges. It posted a non-GAAP adjusted net income of nearly $7.7 million ($0.27 per share), a significant improvement from a loss of nearly $8 million in the previous year. These results surpassed consensus analyst estimates.
However, the issue arose from investor expectations. GeneDx had previously exceeded analyst estimates in more dramatic ways, leading market participants to anticipate continued high levels of outperformance. The recent results did not meet these elevated expectations.
Adding to the negative sentiment, several analysts reduced their price targets for GeneDx stock. BTIG analyst Mark Massaro, for example, adjusted his price target from $115 to $100 per share. Massaro’s analysis suggested that the company trades at four times his 2026 revenue estimate, presenting it as attractively valued. Despite lowering his price target, he maintained a buy recommendation, believing the market’s reaction to the quarterly results was an overreaction. He expressed confidence in GeneDx as a solid entity within the biotech sector, suggesting investors should not desert the stock due to unmet growth expectations.
