Genomic Health, Inc. (GHDX - Free Report) has been gaining investor confidence on stellar results over an extended period. Over the past year, the company’s share price has outperformed its industry. The stock has gained 103.2% against the industry’s 18.6% fall. Also, the company has fared better than the S&P 500’s 13.9% rise.
This developer and marketer of genomic-based clinical tests for cancer diagnosis has a market cap of $2.39 billion. The company’s projected earnings growth rate for the next year is 40.7% in comparison to the industry’s 3.5% rise.
Which Way Are the Estimates Treading?
The company’s estimate revision trend for the current year is positive. Earnings estimates have risen 17.4% to 54 cents per share over the past 90 days. Further, the Zacks Consensus Estimate for current-year revenues of $381.08 million reflects a year-over-year improvement of 11.8%.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for now.
Per our Zacks Style Score system, Genomic Health has a Growth Score of A, which reflects the company’s solid prospects. Our research shows that stocks with a Growth Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Let’s find out whether the recent positive trend is a sustainable one.
What’s Boosting the Stock?
Breast Cancer Reimbursement Prospects Brighter
Genomic Health expects several key catalysts to drive revenues within Oncotype DX breast cancer test in 2018. These catalysts include the implementation of both PAMA reimbursement at a higher level than the 2016 invasive breast rate and AJCC staging criteria. Further, the recently-published ECOG-ACRIN Cancer Research Group TAILORx study results will also provide impetus.
High Potential of Prostate Cancer Test
Genomic Health’s U.S. prostate cancer business consistently accelerated over the last few quarters. The company has seen increased adoption of this test on private reimbursement. Second-quarter revenues in this business rose 63% on a year-over-year basis led by rising test volumes, expanding coverage and payments from private payers along with CMS coverage for intermediate-risk patients.
Geographic Expansion Continues
Having established a strong foothold in the U.S. market, Genomic Health is now making considerable expansion in the international arena. So far, the company has delivered over 900,000 test results to cancer patients in nearly 90 countries. During the second quarter of 2018, international test revenues increased 11% year over year.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2.
Amedisys’ long-term expected earnings growth rate is 19.4%. The stock holds a Zacks Rank #2 at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
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