What Happened?
Shares of oncology (cancer) diagnostics company NeoGenomics (NASDAQ: NEO) fell 20.2% in the morning session after the company reported second-quarter results that included a significant cut to its full-year financial guidance, sparking a selloff.
Although the company posted a 10% year-over-year revenue increase to $181.3 million, this figure fell just short of Wall Street's expectations. The primary concern for investors appeared to be the company's lowered outlook for the full year. NeoGenomics reduced its 2025 revenue forecast to a range of $720-$726 million, down from a previous estimate of approximately $753 million. Furthermore, the company slashed its adjusted EBITDA projections to $41-$44 million from a prior range of $55-$58 million. The company also reported a net loss of $45.1 million for the quarter. This revised forecast overshadowed the quarterly revenue growth, signaling to investors potential challenges ahead in the company's growth and profitability plans.
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What Is The Market Telling Us
NeoGenomics’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for NeoGenomics and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 7% on the news that several negative developments weighed on the sector. Weakness in managed care providers was a significant factor, with companies like Elevance Health and Humana seeing declines due to an analyst downgrade and a lost lawsuit regarding Medicare bonus payments, respectively. Additionally, some pharmaceutical and biotech companies experienced sharp drops following unfavorable news; for instance, Sarepta Therapeutics plunged after a report indicated another patient death tied to its experimental gene therapy, and GSK's blood cancer drug dosage was voted against by the FDA advisory committee. Broader market sentiment, including concerns about rising costs and inadequate pricing for 2025 plans among health insurers, also contributed to the downward pressure on healthcare equities.
NeoGenomics is down 69.1% since the beginning of the year, and at $5.10 per share, it is trading 72.6% below its 52-week high of $18.61 from January 2025. Investors who bought $1,000 worth of NeoGenomics’s shares 5 years ago would now be looking at an investment worth $135.89.
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