WGS Stock Gains on Q2 Earnings and Revenue Beat, Raises '25 Sales View

GeneDx Holdings Corp. WGS posted second-quarter 2025 adjusted diluted earnings per share (EPS) of 50 cents against a loss of 8 cents per share in the year-ago period. EPS surpassed the bottom-line estimate of 10 cents by a huge 400%.

The company reported GAAP diluted EPS of 36 cents compared to the year-ago period’s loss per share of $1.10.

WGS’ Q2 Revenues

Total revenues increased 45.6% year over year to $102.7 million. The metric surpassed the Zacks Consensus Estimate by 21.2%.

Exome and genome test revenues grew 69% year over year to $85.9 million.

Following the earnings announcement, WGS stock edged up 26% in the after-market trading session today.

WGS’ Q2 Margins

The gross profit increased 65.1% year over year to $70.9 million. The gross margin expanded 813 basis points (bps) to 69%.

Selling and marketing expenses rose 17.3% to $19.4 million. General and administrative expenses increased 5.3% to $27.4 million. Research and development expenses increased 38.3% to $15.1 million.

The adjusted total operating expenses were $61.9 million, reflecting an increase of 15.7% year over year. The company incurred an operating profit of $9 million against an operating loss of $10.6 million in the year-ago period.

WGS’ Cash Position

GeneDx exited the second quarter with cash, cash equivalents and marketable securities of $134.6 million compared with $159.2 million at the end of the first quarter of 2025.

Cumulative cash flow provided by operating activities was $20.6 million against $20.9 million cumulative cash flow used in operating activities in the prior-year period.

GeneDx Holdings Corp. Price, Consensus and EPS Surprise

GeneDx Holdings Corp. price-consensus-eps-surprise-chart | GeneDx Holdings Corp. Quote

WGS’ 2025 Guidance

The company raised its full-year 2025 sales guidance to $400-$415 million from $360-$375 million. The Zacks Consensus Estimate is currently pegged at $371.3 million.

Adjusted net income for the year is anticipated to be positive. The Zacks Consensus Estimate for earnings is pegged at $1.13 per share.

Our Take on WGS

WGS ended the second quarter of 2025 with better-than-expected results, wherein both earnings and revenues beat estimates. Both metrics were also up on a year-over-year basis. GeneDx achieved a milestone by crossing the $100 million revenue mark and delivering the fourth consecutive profitable quarter. Exome and genome test result volume grew to 23.1 million, up 28% year over year. Meanwhile, the expansion of gross margin in the quarter was encouraging.

During the second quarter, the company advanced in its growth strategy with the acquisition of Fabric Genomics, enabling a hybrid centralized and decentralized model for delivering genomic insights globally. Additionally, WGS expanded its commercial focus by including inborn errors of immunity as a new indication for its genetic testing.

Furthermore, WGS’ raised 2025 sales outlook bodes well.

WGS’ Zacks Rank and Other Key Picks

GeneDx currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Boston Scientific BSX, Cardinal Health CAH and Cencora COR.

Boston Scientific, carrying a Zacks Rank #2 at present, reported a first-quarter 2025 adjusted EPS of 75 cents, which beat the Zacks Consensus Estimate by 0.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenues of $4.66 billion topped the Zacks Consensus Estimate by 20.9%. BSX has a long-term earnings growth rate of 13.2% compared with the industry’s 13.9%.

Cardinal Health, carrying a Zacks Rank #2 at present, posted third-quarter fiscal 2025 adjusted EPS of $2.35, which exceeded the Zacks Consensus Estimate by 9.3%. Revenues of $54.88 billion missed the Zacks Consensus Estimate by 0.3%.

CAH has an estimated long-term earnings growth rate of 10.9% compared with the industry’s 9.9%.

Cencora currently carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 adjusted EPS is currently pegged at $3.78 and the same for revenues is pinned at $80.33 billion.

Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings yield of 5.4% compares favorably with the industry’s 4.1%. 

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This article originally published on Zacks Investment Research (zacks.com).

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