GeneDx Holdings Corp. WGS has made the biggest gains on the Russell 2000 Index in 2024 as the biotechnology company moves toward more comprehensive genetic testing.

The Maryland-based companys shares have soared 1,101% so far this year as of midday Thursday, according to Tradingview.

Goldman Sachs analyst Matthew Sykes attributes much of GeneDXs positive momentum to shifting its testing. The company went from panel-based tests, which look for variants in more than one gene, to exome/genome testing, which analyzes the bulk of a persons DNA to find genetic variations.

Also Read: GeneDx Stock Climbs After Better-Than-Expected Q1 Results, Raises FY24 Guidance

We remain optimistic about WGS's continued focus on converting its mix shift of panel-based tests to whole exome/genome-based tests, Sykes wrote in a note on Wednesday.

As of 1Q24, 30% of their tests were exome/genome-based, whereas this metric was 16% in 1Q23.

He said the transition has expanded the companys margins from 33% in the first quarter of 2023 to 61% in this years first quarter.

We see gross margins continuing to improve going forward, yet see more moderated growth in out years, reaching the mid-high 60% range exiting 2026, he wrote.

We see this mix shift evolution as the key driver of WGS's growth in the near term given their initial focus on rare disease/pediatrics.

Goldman Sachs maintains revenue estimates for GeneDx at $243 million for 2024, $269 million for 2025 and $306 million for 2026. It expects the company to post losses per share of $1.07 for this year and $0.21 for next year and earnings per share of $0.35 for 2026.

It has given GeneDx a Neutral rating and has increased its price target on the stock from $12.50 to $28.

Analysts expect GeneDx to post a $0.30 loss per share when it reports second-quarter earnings on July 30, up from a $0.33 loss per share registered for the first quarter, according to Benzinga Pro.

GeneDx has distanced itself from stocks held by runner-up small-cap companies Massachusetts-based Corbus Holdings Inc. CRBP and Root, Inc. ROOT.

Corbus has risen 834% since the beginning of 2024, while Root, an Ohio-based online car insurance company, has gained 670%.

Price Action: GeneDx has slipped 3.36% to $32.18 by Thursdays midday trading, while Corbus has fallen 5.26% to $55.86 and Root has risen 1.49% to $80.59.

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GeneDx Leads Russell 2000 This Year As It Shifts To More Comprehensive Genetic Testing - Benzinga

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