Genomic Health, Inc (GHDX - Analyst Report) shares are doing great after a bullish quarterly report. Analyst estimates are on the rise, pushing GHDX to a Zacks #1 Rank (Strong Buy).
There is always a worry that shares will drop right back down after a sharp increase, but it looks like investors are happy with shares at this higher level.
Genomic Health develops genomic-based lab services for cancer patients. The company's Oncotype DX can be used for breast cancer tests to predict recurrence and chemotherapy benefits for breast cancer. Oncotype DX can now also be used for colon cancer, as of this year.
Revenue Up 18%
On Nov 8 Genomic Health reported third-quarter results that showed an 18% increase in revenue, to $46.3 million. Net income was $3.7 million, giving the company back to back profitable quarters.
Earnings broke down to 12 cents per share. There were no estimates for the period, but given the surge in share price, it was better than many expected.
Following the news that full-year Zacks Consensus Estimate for this year jumped into the black, to a 14 cent profit from a 1 cent loss. Next year's forecasts are up a nickel on average, to 31 cents.
Last year the company lost 33 cents per share, so the growth rates are a bit skewed for this year, but earnings should more than double in 2011.
Shares of GHDX spiked after the quarterly results were released and thankfully were able to hold onto those gains. You can see that there was some profit taking but the volatility was relatively light and shares have held this level nicely.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service