On Sep 3, we issued an updated research report on Genomic Health Inc . This Zacks Rank #2 (Buy) company continues to make significant progress with its Oncotype DX breast cancer test. However, higher cost of production persists to weigh heavily on its bottom line.
Over the past year, shares of Genomic Health have outperformed its industry. The stock has rallied 18.6% against the industry’s 27.5% fall.
Genomic Health exited the second quarter on a solid note with better-than-expected earnings results. The company demonstrated strength across its entire business, driven by impressive performances in the United States and internationally. Also, within the prostate cancer space, the company is witnessing a robust improvement in volume as Oncotype DX GPS test results consistently lead the market in low- and intermediate-risk prostate cancer test adoption.
Further, the company is seeing buoyant global demand for Oncotype DX Breast Recurrence Score test usage. Moreover, it has progressed in terms of reimbursement update on Oncotype DX Breast Recurrence Score test in Germany. As a major milestone, recently, the Oncotype DX Breast Recurrence Score test has been recommended to guide chemotherapy treatment use for patients with hormone-receptor positive, HER-2 negative early-stage breast cancer with or without lymph node involvement (up to three positive nodes).
Genomic Health is currently working on its impending merger with cancer diagnostics major Exact Sciences, which will combine two of the strongest brands in cancer diagnostics, Cologuard and OncotypeDX, thereby providing a platform for growth.
However, the company’s sole reliance on the Breast Oncotype DX test is a concern. Moreover, the company relentlessly faces fierce competition for Oncotype DX tests. Meanwhile, Genomic Health has adopted several strategies to improve its revenue performance. These include portfolio expansion and penetration in the international arena. This, in turn, has significantly escalated costs and operating expenses for the company so far.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Valeritas Holdings, Inc. , Myomo, Inc. (MYO - Free Report) and National Vision Holdings, Inc. (EYE - Free Report) . You cansee the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Valeritas Holdings currently carries a Zacks Rank #2. Its third-quarter earnings growth rate is projected at 43.8%.
Myomo’s long-term expected earnings growth rate is 25%. The stock currently carries a Zacks Rank of 2.
National Vision’s long-term expected earnings growth rate is 17.2%. The stock is a Zacks #2 Ranked player.
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