Genomic Health, Inc. (GHDX - Free Report) has been gaining investors’ confidence on continued positive results. Over the past year, the stock has outperformed its industry. The stock has gained 65.5% against the industry’s 30.9% fall and the S&P 500’s 12.3% decline.
This renowned global cancer company, with a focus on advanced molecular diagnostics, has a market cap of $2.14 billion.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
Oncotype DX Colon Cancer Test Continues to Grow
Though the colon cancer test is yet to make any significant contribution to the top line, it has helped Genomic Health transform from a one-product U.S.-focused company to a global cancer corporation with more than 31,550 Oncotype test (in three major cancer types) results. Earlier in 2016, Genomic Health had released results from the large Sunrise clinical validation study of the Oncotype DX colon cancer test, which demonstrated the accuracy of Genomic Health’s Oncotype DX Colon Recurrence Score in predicting recurrence risk in Japanese patients with stage II and III colon cancer.
Focus on International Markets to Boost Growth
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 third quarter of 2018, international test revenues increased 22% year over year (up 20% at adjusted constant currency).
Brighter Prospects for Breast Cancer Reimbursement in 2018
So far, Genomic Health has witnessed healthy progress with regard to establishing coverage for its Oncotype DX breast cancer test. During the third quarter, the company delivered more than 34,810 Oncotype DX test results, up 10% year over year. Further, U.S. invasive breast cancer revenues grew 24% year over year. Notably, presentation and publication of the TAILORx study results drove test volumes by 12% on a year-over-year basis.
Which Way Are Estimates Treading?
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 30 cents, reflecting a year-over-year increase of 275%. The same for revenues stands at $101.88 million, indicating a 16.5% rise year over year.
For the full year, the Zacks Consensus Estimate is pegged at earnings of $1.06. The same for revenues stands at $391.32 million, indicating a 14.8% rise year over year.
Other Key Picks
Other top-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Veeva Systems (VEEV - Free Report) .
Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings, with a Zacks Rank #2 (Buy), has an earnings growth rate of 31.2% for the first quarter of 2019.
Surmodics’ long-term earnings growth rate is projected at 10%. The stock carries a Zacks Rank of 2 currently.
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