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Genomic Health Cancer Tests Strong, Operating Expenses a Woe
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On Jun 19, we issued an updated research report on Redwood City, CA-based Genomic Health Inc . It is a global cancer research company with a focus on advanced molecular diagnostics.
Over the past one month, Genomic Health has been trading above the Zacks categorized Medical - Biomedical and Genetics industry. The company has gained 10.1%, compared to the broader industry’s 5.9% over the same period. Genomic Health continues to see strong growth with respect to its cancer scores. We are also encouraged by the decline in cost of sales along with gross margin expansion, on account of higher revenue growth.
Genomic Health is witnessing healthy progress with regard to expanding its Oncotype DX breast cancer test. Of late, the company has witnessed growth in invasive breast cancer revenues. It has also seen growth in the global breast cancer business in the last reported first quarter. Management anticipates the domestic invasive breast business to grow in the 3% to 5% range in 2017.
The company’s prostate cancer tests also hold a lot of promise. In the last reported first quarter, the business saw impressive 40% growth in tests and 26% revenue year-over-year growth. Recently, the company presented several favorable results related to its Oncotype DX Genomic Prostate Score. The company is currently focusing on its partnership with Epic Sciences to launch Oncotype DX AR-V7 for prostate cancer by the end of 2017.
Additionally, the company’s colon cancer test helped it attain a global identity with more than 26,060 Oncotype DX test (in three major cancer types) results. Having established a strong foothold in the U.S., Genomic Health is now making considerable expansion in the international arena.
On the flip side, management has not issued any guidance. Genomic Health’s high dependence on the Breast Oncotype DX test for profits is also a concern. The company’s cancer tests and studies are still in the early-to-mid stage of development and bear validation risks. Thus, the cancer test business fails to make any significant contribution toward revenues.
We are also concerned about the company’s rising operating losses. Genomic Health has adopted several strategies to drive its top line, including portfolio expansion and penetration in the international arena which are driving its selling and marketing expenses.
Zacks Rank and Key Picks
Genomic Health currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are Align Technology, Inc. (ALGN - Free Report) , Inogen, Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc. (AXDX - Free Report) . Notably, Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 32.3% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 26.2% over the last three months.
Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has rallied roughly 24.5% over the last three months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
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Genomic Health Cancer Tests Strong, Operating Expenses a Woe
On Jun 19, we issued an updated research report on Redwood City, CA-based Genomic Health Inc . It is a global cancer research company with a focus on advanced molecular diagnostics.
Over the past one month, Genomic Health has been trading above the Zacks categorized Medical - Biomedical and Genetics industry. The company has gained 10.1%, compared to the broader industry’s 5.9% over the same period. Genomic Health continues to see strong growth with respect to its cancer scores. We are also encouraged by the decline in cost of sales along with gross margin expansion, on account of higher revenue growth.
Genomic Health is witnessing healthy progress with regard to expanding its Oncotype DX breast cancer test. Of late, the company has witnessed growth in invasive breast cancer revenues. It has also seen growth in the global breast cancer business in the last reported first quarter. Management anticipates the domestic invasive breast business to grow in the 3% to 5% range in 2017.
The company’s prostate cancer tests also hold a lot of promise. In the last reported first quarter, the business saw impressive 40% growth in tests and 26% revenue year-over-year growth. Recently, the company presented several favorable results related to its Oncotype DX Genomic Prostate Score. The company is currently focusing on its partnership with Epic Sciences to launch Oncotype DX AR-V7 for prostate cancer by the end of 2017.
Additionally, the company’s colon cancer test helped it attain a global identity with more than 26,060 Oncotype DX test (in three major cancer types) results. Having established a strong foothold in the U.S., Genomic Health is now making considerable expansion in the international arena.
On the flip side, management has not issued any guidance. Genomic Health’s high dependence on the Breast Oncotype DX test for profits is also a concern. The company’s cancer tests and studies are still in the early-to-mid stage of development and bear validation risks. Thus, the cancer test business fails to make any significant contribution toward revenues.
We are also concerned about the company’s rising operating losses. Genomic Health has adopted several strategies to drive its top line, including portfolio expansion and penetration in the international arena which are driving its selling and marketing expenses.
Zacks Rank and Key Picks
Genomic Health currently carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are Align Technology, Inc. (ALGN - Free Report) , Inogen, Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc. (AXDX - Free Report) . Notably, Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 32.3% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has gained around 26.2% over the last three months.
Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has rallied roughly 24.5% over the last three months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>